Porter Corporation NOTE: the Following Multiple Choice Questions Require Present

question 54

Multiple Choice

Porter Corporation NOTE: The following multiple choice questions require present value information.
On January 1,2012,Porter Corporation signed a five-year noncancelable lease for certain machinery.The terms of the lease called for:
For the year ended December 31,2012,Porter should record depreciation expense for the leased equipment equal to

• A) $55,000
• B) $39,927
• C) $47,912
• D) $0

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Definitions:

Quarterly Contributions

Payments or deposits made into a financial account or investment plan every three months.

Annually Compounded

An interest calculation method where interest is added to the principal balance annually, increasing the amount of subsequent interest.

Annually Compounded

Compound interest calculated and added to the principal once a year, affecting the total interest earned or paid.

Nominal Rate

The interest rate stated on a bond or loan before adjusting for inflation or other factors.