DRM Corporation Leased a Piece of Machinery and Correctly Classified

question 7

Multiple Choice

DRM Corporation leased a piece of machinery and correctly classified and recorded it as a finance lease. At the date of signing, January 1, 2017, the asset and lease obligation were recorded for $42,000. The first lease payment of $8,200 was due December 31, 2017 and the interest rate they used in their calculations was 7%. The lease term was 10 years. Which of the following best describes what would be reported on AFC's Statement of Income for the year ending December 31, 2017?

• A) $8,200 Lease Expense
• B) $8,200 Lease Expense, $4,200 Depreciation Expense
• C) $2,940 Interest Expense, $1,260 Depreciation Expense
• D) $2,940 Interest Expense, $4,200 Depreciation Expense

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Definitions:

Masturbate

The act of self-stimulation of one's own genitals for the purpose of sexual pleasure.

Orgasm

The climax of sexual excitement, characterized by intensely pleasurable feelings centered in the genitals and, in some cases, other parts of the body.

Good Health

A state of complete physical, mental, and social well-being, not merely the absence of disease or infirmity, as defined by the World Health Organization.

Sexual Attractiveness

The degree to which a person’s physical traits, behaviors, or characteristics are considered appealing or desirable in a sexual or romantic context.