Use the Following Information for Questions

question 20

Multiple Choice

Use the following information for questions.
On January 1, 2011, Ogleby Corporation signed a five-year noncancelable lease for equipment.The terms of the lease called for Ogleby to make annual payments of $60,000 at the end of each year for five years with title to pass to Ogleby at the end of this period.The equipment has an estimated useful life of 7 years and no residual value.Ogleby uses the straight-line method of depreciation for all of its fixed assets.Ogleby accordingly accounts for this lease transaction as a finance lease.The minimum lease payments were determined to have a present value of $227,448 at an effective interest rate of 10%.
-With respect to this capitalized lease, for 2011 Ogleby should record

• A)rent expense of $60,000.
• B)interest expense of $22,745 and depreciation expense of $45,489.
• C)interest expense of $22,745 and depreciation expense of $32,493.
• D)interest expense of $30,000 and depreciation expense of $45,489.

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Definitions:

Mobile Communication

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Meaningful Challenges

Tasks or problems that are significant and engaging, offering opportunities for learning and growth.

Radical Connectivity

The extensive and pervasive integration of digital technology into daily life, leading to new forms of communication and interaction.

Digital Information Fluency

The ability to find, evaluate, and use digital information effectively.