Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on january 2, 2020, cruise ltd. signed a ten-year

On January 2, 2020, Cruise Ltd. signed a ten-year non-cancellable lease for a heavy-duty drill...

80.2K

Verified Solution

Question

Accounting

On January 2, 2020, Cruise Ltd. signed a ten-year non-cancellable lease for a heavy-duty drill press. The lease required annual payments of $52,500, starting December 31, 2020, with title passing to Cruise at the end of the lease. Cruise 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. Cruise uses straight-line depreciation for all its plant assets. The lease payments were determined to have a present value of $352,279, based on an implicit interest rate of 8%. On their 2020 income statement, how much depreciation expense should Cruise report in connection with this lease?

$35,228

$21,000

$10,500

$17,614

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

If a man had high levels of gonadotropin-releasing hormone, what might be the explanation? A. he is...

Medical Sciences
Q

1.Suppose that you are interested in buying several (>10) new computers for the gaming café you...

Programming
Q

to seeds which of the following characteristics is unique to the seed producing plants A...

Biology
Q

Find the value of x Write your answer as a decimal N 29 X O...

Geometry
Q

The figure below is a square Find the length of side a to the nearest...

Geometry
Q

3 5 l 6 X

Geometry
Q

Consider the following compound inequality x 1 or x 2 a Graph the compound inequality...

Basic Math
Q

Match each system of equations to the corresponding graphical representation below A 2 19 x...

Algebra
Q

Find the area of a triangle with sides of length 14 and 20 and included...

Algebra
Q

elizabeth uses street vendors to sell pirated versions of well-known cds to the general public....

Accounting
Q

Explain the accounting cycle

Accounting
Q

Plattsburg Plastics Corporation manufactures a variety of plastic products, including a series of molded chairs....

Accounting