Gambet Labs Entered into a Lease Agreement on January 1,20X3,to $\begin{array} { l l l } \text { Leasehold Amertization Expense } & 4,575 & \\\text { Machine Leasehold } & & 4,575 \\\end{array}$

question 108

Multiple Choice

Gambet Labs entered into a lease agreement on January 1,20X3,to use an x-ray machine.The machine has a useful life of 6 years.Gambet Labs will make annual lease payments of $13,000 for 6 years,beginning on December 31,20X3.Assume a 14% interest rate.Using the present value tables,what is the journal entry to be made by Gambet Labs on December 31,20X4,to amortize the leased asset,assuming straight-line amortization is used?

• A)No journal entry is necessary.
• B)\(\begin{array} { l l l }
• \text { Leasehold Amertization Expense } & 4,575 & \\
• \text { Machine Leasehold } & & 4,575 \\
• \end{array}\)
• C)\(\begin{array}{lccc}
• \text { Leasehold Amortization Expense } & \text { 8,426 } & \\
• \text { Machine Leasehold } & & \text { 1,426 } \\
• \end{array}\)
• D)\(\begin{array}{lccc}
• \text { Leasehold Amortization Expense } & 13,000 & \\
• \quad \text { Machine Leasehold } & & 13,000 \\
• \end{array}\)
• E)\(\begin{array}{lccc}
• \text { Leasehold Amortization Expense } & 13,000 & \\
• \text { Capital Lease Liability } & & 13,000
• \end{array}\)

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Definitions:

Segregating Independently

A principle of genetics where different genes independently separate from one another when reproductive cells develop.

Survival

The continuation of life or existence, especially under challenging conditions or when faced with threats.

Birth Weight

The weight of a baby immediately after birth, an important indicator of a newborn's health and development potential.

Selection

The process by which certain traits become more prevalent in a population because they confer a survival or reproductive advantage.