On January 2, 2023, Sandhill Ltd. signed a ten-year non-cancellable lease for a heavy-duty drill press. The lease required annual payments of $57500, starting December 31, 2023, with title passing to Sandhill at the end of the lease. Sandhill is accounting for this lease as a capital (finance) lease. The drill press has an estimated useful life of 20 years, with no residual value. Sandhill uses straight- line depreciation for all its plant assets. The lease payments were determined to have a present value of $385830, based on an implicit interest rate of 8%. On its 2023 income statement, how much depreciation expense should Cambridge report in connection with this lease? O $19292 $23000 O $38584 O $11500

On January 2, 2023, Sandhill Ltd. signed a ten-year non-cancellable lease for a heavy-duty drill press. The lease required annual payments of $57500, starting December 31, 2023, with title passing to Sandhill at the end of the lease. Sandhill is accounting for this lease as a capital (finance) lease. The drill press has an estimated useful life of 20 years, with no residual value. Sandhill uses straight- line depreciation for all its plant assets. The lease payments were determined to have a present value of $385830, based on an implicit interest rate of 8%. On its 2023 income statement, how much depreciation expense should Cambridge report in connection with this lease? O $19292 $23000 O $38584 O $11500

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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