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On January 1, 2014, Stacie Signed a Lease Agreement with Amy

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On January 1, 2014, Stacie signed a lease agreement with Amy. Amy will use the equipment and make ten annual payments of $25,000 beginning December 31, 2014. The lease is considered to be a capital lease. When reading the Amy income statement, you would expect to find which of the following accounts?


Definitions:

Differential Carrier

The drive axle assembly that houses the differential gearing.

Differential Pinion Gears

Small gears within the differential that engage with the larger ring gear to allow wheels on the same axle to rotate at different speeds.

Low Axle Lube Level

Low axle lube level indicates an insufficient amount of lubricant in the vehicle's axle system, which can lead to increased friction and damage.

Pinion Gear

A small gear that engages with a larger gear or rack, often used to transmit rotational motion in machinery.

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