Use the Following Information for Questions

question 33

Multiple Choice

Use the following information for questions
Alt Corporation enters into an agreement with Yates Rentals Co.on January 1, 2016 for the purpose of leasing a machine to be used in its manufacturing operations.The following data pertain to the agreement:
(a) The term of the noncancelable lease is 3 years with no renewal option.Payments of $287,432 are due on January 1 of each year, starting January 1, 2016.
(b) The fair value of the machine on January 1, 2016, is $800,000.The machine has a remaining economic life of 10 years, with no residual value.The machine reverts to the lessor upon the termination of the lease.
(c) Alt depreciates all machinery it owns on a straight-line basis.
(d) Alt's incremental borrowing rate is 10% per year.Alt does not have knowledge of the 8% implicit rate used by Yates.
-If Alt accounts for the lease as an operating lease, what expenses will be recorded as a consequence of the lease during the fiscal year ended December 31, 2016?

• A)Depreciation Expense
• B)Rent Expense
• C)Interest Expense
• D)Depreciation Expense and Interest Expense

---

Definitions:

Selective

Characterized by carefully choosing or making choices from a wide variety of options, often with a specific standard or criteria in mind.

Herman and Chomsky

Co-authors of the "Propaganda Model," they explored how mass media serves the interests of elite groups, influencing public perception and opinion.

Environmental Pollution

The contamination of the natural environment due to harmful substances or energy such as noise, heat, or light, leading to adverse effects on living organisms and ecosystems.

Web Herding

The online phenomenon where individuals are influenced by the actions or opinions of a large group, often leading to conformist behavior or shifts in public opinion.