On January 1, Twix Company as Lessee Signed a Ten-Year

question 13

Multiple Choice

On January 1, Twix Company as lessee signed a ten-year noncancelable lease for a machine with annual payments of $60,000. The first payment was also made on January 1. Twix appropriately treated this transaction as a capital lease. The ten lease payments have a present value of $405,000 at January 1, based on implicit interest of 10 percent. For the first year, Twix should record interest expense of

• A) $0.
• B) $6,000.
• C) $34,500.
• D) $40,500.

---

Definitions:

Memory Retrieval

The process of recalling or bringing into consciousness information or experiences stored in memory.

Youth

The period of life between childhood and adulthood; characterized by the development and maturation of the individual.

Implicit Memory

A type of memory that allows individuals to perform tasks without conscious awareness of these previous experiences, such as procedural memory for skills.

Cerebellum

A region of the brain at the back of the skull in vertebrates, responsible for coordinating and regulating muscular activity.