On January 1, 2012, Porter Corporation Signed a Five-Year Non-Cancelable $8 \%$

question 12

Multiple Choice

On January 1, 2012, Porter Corporation signed a five-year non-cancelable lease for certain machinery.The terms of the lease called for:
1) Price to make annual payments of \$60,000 at the end of each year (starting an Dec. 31, 2012) Far Ene years. Parter must return the equigment to the lessor end of this periad.
2) The machinery has an estimated useful life of o years and no exgected salvage value.
3) Parter uses the straight-line method af depreciation far all of its fixed assets.
4) Parter's incremental barrowing rate is $8 \%$
5) The fair value of the asset at January 1,2012 is $\$ 27,000$ .
-At January 1,2012,Porter should record an asset and liability with respect to the equipment lease equal to:

• A) $258,726
• B) $239,562
• C) $275,000
• D) $0

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Definitions:

Research Hypothesis

A statement proposing a potential explanation for a phenomenon or a predicted relationship between variables, typically tested through experimentation or observation.

Null Hypothesis

A hypothesis that assumes no significant difference or relationship between variables in statistical testing.

Critical Value

A point on the scale of a statistical distribution that marks the boundary of an acceptance region for a test of hypothesis.

Standard Deviation

A statistical measure that quantifies the amount of dispersion or variation in a set of values.