Assume That a Company Leases Equipment for a 5-Year Period

question 24

Multiple Choice

Assume that a company leases equipment for a 5-year period under a capital lease and agrees to pay an annual rental of $16,000 at the end of each year. If the present value of the lease payments is $59,200, the entry to record the leasing transaction would include

• A) A debit to Lease Expense of $59,200
• B) A debit to Leased Equipment of $59,200
• C) A debit to Leased Equipment of $80,000
• D) A credit to Rent Payable of $16,000

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Definitions:

Occipital

Related to the occipital lobe of the brain, which mainly handles the processing of visual information.

Frontal

Pertaining to the frontal lobe of the brain, which is involved in executive functions such as decision-making, problem-solving, and control of behavior.

Somatosensory Cortex

A part of the brain responsible for processing sensory information from the body, including touch, temperature, pain, and body position.

Corpus Callosum

A thick band of nerve fibers that divides the cerebral cortex lobes into left and right hemispheres and enables communication between them.