Nanotech Inc

question 72

Multiple Choice

Nanotech Inc.leased a new machine having an expected useful life of 20 years from Union Co.Terms of the noncancelable 15-year lease were that Nanotech would gain title to the property upon payment of a sum equal to the fair market value of the machine at the termination of the lease.Nanotech accounted for the lease as a capital lease and recorded an asset and a liability in the financial records.The asset recorded under this lease should properly be amortized over

• A) 5 years (the period of actual ownership).
• B) 15 years (75 percent of the 20-year asset life).
• C) 20 years (the total asset life).
• D) 15 years (the term of the lease).

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Definitions:

Small Scale

Referring to activities or operations of a reduced, limited, or miniature size, often implying a more local, personalized, or less intensive approach.

Photovoltaic Cells

Devices that convert sunlight directly into electricity through the photovoltaic effect.

Solar Energy

Energy obtained from the sun's radiation, used in generating power and providing heat, representing a renewable and clean energy source.

Photoelectric Cells

Devices that convert light energy into electrical energy through the photoelectric effect.