Use the Following Information for Questions

question 89

Multiple Choice

Use the following information for Questions
Yueve's Company is negotiating leases for three store locations.Yueve's incremental borrowing rate is 12 percent and the lessor's implicit rate is unknown (it is impracticable to determine) .
Each store will have a useful economic life of 30 years.Lease payments will be made at the end of each year.Based on the data below properly classify each of the leases as an operating lease or a finance lease.The purchase price for each property is listed as an alternative to leasing.
-On December 1, 2016, Goetz Corporation leased office space for 10 years at a monthly rental of $90,000.On that date Perez paid the landlord the following amounts: The entire amount of $765,000 was charged to rent expense in 2016.What amount should Goetz have charged to expense for the year ended December 31, 2016?

• A)$90,000
• B)$94,125
• C)$184,125
• D)$495,000

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