On January 1, 2020, X-Man Corp

question 102

Multiple Choice

On January 1, 2020, X-Man Corp. signed a ten-year non-cancellable lease for new machinery. The terms of the lease called for X-Man to make annual payments of $ 100,000 at the end of each year for ten years, with title to pass to X-Man at the end of the lease period. X-Man accordingly accounted for this lease transaction as a finance lease. The machinery has an estimated useful life of 15 years and no residual value. X-Man uses straight-line depreciation for all of its property, plant and equipment. The lease payments were determined to have a present value of $ 671,008 at an effective interest rate of 8%. It was also determined that the fair value of the machinery on January 1, 2020 was $ 674,000. With respect to this lease, for the year ending December 31, 2020, X-Man should report (rounded to the nearest dollar)

• A) lease expense of $ 100,000, and depreciation expense of $ 44,734.
• B) interest expense of $ 53,681 and depreciation expense of $ 67,101.
• C) interest expense of $ 53,681 and depreciation expense of $ 44,734.
• D) interest expense of $ 53,920 and depreciation expense of $ 44,933.

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Definitions:

Semantics

The branch of linguistics and logic concerned with meaning, including the study of signs, symbols, language, and their significant content.

Psycholinguistics

The study of how language is acquired, produced, and used and how the sounds and symbols of language are translated into meaning.

Linguistics

The scientific study of language and its structure, including the study of morphology, syntax, phonetics, and semantics.

Communication Theory

An area of study that examines how information is transmitted between individuals and the efficiency and effectiveness of those processes.