Happy Corporation Leased a Building from Sensor Company

question 123

Multiple Choice

Happy Corporation leased a building from Sensor Company.The 10-year lease is recorded as a capital lease.The annual payments are $10,000 and the recorded cost of the asset is $67,100.The straight-line method is used to calculate depreciation.Which of the following statements is true?

• A) Depreciation expense of $6,710 will be recorded each year.
• B) Depreciation expense of $10,000 will be recorded each year.
• C) No depreciation expense will be recorded by Happy Corporation.
• D) No interest expense will be recorded by Happy Corporation.

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Definitions:

Noncash Gifts

Items of value given as presents that are not in the form of currency or monetary instruments.

Consumer Preferences

The tastes, preferences, and priorities that influence the buying decisions of individuals or households.

Marginal-Utility Schedules

Tables or charts that illustrate the additional satisfaction or utility a consumer receives from consuming an additional unit of a good or service.