Use the Following Information to Answer the Next Three Questions

question 7

Multiple Choice

Use the following information to answer the next three questions.
On January 1, 2013, BelgianAir purchases an airplane for €14,400,000.The components of the airplane and their useful lives are as follows:
$\begin{array}{|c|c|c|}\hline \text { Component } & \text { Cost } & \text { Usefull life } \\\hline \text { Frame } & € 7,200,000 & 24 \text { years } \\\hline \text { Engine } & 4,800,000 & 20 \text { years } \\\hline \text { Other } & 2,400,000 & 10 \text { years } \\\hline\end{array}$ BelgianAir uses the straight-line method of depreciation.The asset is assumed to have no salvage value.
-Under IFRS, the entry to record depreciation expense on the asset at December 31, 2014 will include a credit to accumulated depreciation of

• A)€1,440,000.
• B)€1,200,000
• C)€800,000.
• D)€600,000.

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Definitions:

Maturity Date

is the specified date on which the final payment of a loan, bond, or other financial instrument is due to be paid.

Face Value

The nominal or dollar value printed on a financial instrument, such as a bond or stock certificate.

Bond Certificate

A physical document representing the investor's right to receive the principal and interest from a bond issuer.

Semiannual Interest

Interest that is calculated and paid twice a year, often on a bond or loan.