On January 2, 2012, Tech Metals Co $\begin{array}{ll}Machine&500,000\\Lease~Obligation&~~~~~~~~~500,000\end{array}$ B) $\begin{array}{l}\text{Prepaid Rent}&250,000\\\text{Lease Obligation}&~~~~~~~~~~~~~~~250,000\\\end{array}$

question 11

Multiple Choice

On January 2, 2012, Tech Metals Co. leased a mining machine from BX Leasing Corporation. The lease qualifies as an operating lease. The annual payments are $50,000 at the end of each year, and the life of the lease is 10 years. What entry would Tech Metals Co. make when the machine is delivered by BX Leasing Corporation.?

• A) \(\begin{array}{ll}
• Machine&500,000\\
• Lease~Obligation&~~~~~~~~~500,000
• \end{array}\)
• B) \(\begin{array}{l}
• \text{Prepaid Rent}&250,000\\
• \text{Lease Obligation}&~~~~~~~~~~~~~~~250,000\\
• \end{array}\)
• C) Rent Expense \(~~~~~~~~\) 50,000
• Cash \(~~~~~~~~~~~~~~~~~~~~~~~~~~\) 50,000
• D) No entry is necessary.

Understand the importance of management by exception in controlling operations.

Understand the principles of recording interest income and the impact on financial statements.

Grasp the concept and implications of loan collateralization and the responsibilities of borrowing and lending parties.

Master the process of recognizing and recording sales and interest income on notes receivable.

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Behavior that violates organizational norms and causes harm to the organization and/or employees.

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A societal characteristic that indicates the degree to which individuals with less authority within organizations or communities accept and anticipate an unequal distribution of power.

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A mental outlook that typically sees the good in situations, anticipates positive outcomes, and is generally optimistic.