Karuna Consulting Leased a Building on January 2, 2013

question 149

Multiple Choice

Karuna Consulting leased a building on January 2, 2013. The lease qualifies as an operating lease. The annual payments are $25,000 at the beginning of each year, and the life of the lease is 10 years. What entry would the company make on January 2, 2013?

• A)Machine 250,000 Lease Obligation 250,000
• B)Prepaid Rent 250,000 Lease Obligation 250,000
• C)Prepaid Rent 25,000 Lease Obligation 25,000
• D)No entry is necessary.

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Definitions:

Sedentary Lifestyle

A way of life that involves little physical activity, potentially leading to health problems.

Deconditioning

The loss of physical fitness or muscle strength due to inactivity or not exercising.

Physical Exercise

Activities requiring physical effort, carried out to sustain or improve health and fitness.

Development

The process of growth or progress, typically involving the gradual increase in complexity or capability.