Mercury Package Express Service Properly Capitalized at $93,598 a Large

question 61

Multiple Choice

Mercury Package Express Service properly capitalized at $93,598 a large truck it had leased on January 1,2014.The truck has a 14-year useful life.Title to the truck passes to Mercury at the end of the 12-year lease term.Mercury depreciates other similar trucks on the straight-line method with no salvage value.The lease agreement calls for annual payments of $11,500 at the beginning of each year of the lease term.The interest rate implicit in the lease (which is known by the lessee) is 8%. How much depreciation and interest expense should Mercury record for 2015?
Depreciation Interest
Expense Expense

• A) $7,803 $6,568
• B) $6,686 $6,568
• C) $6,686 $6,173
• D) $7,830 $6,173

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Definitions:

Schizophrenia

A long-term mental disorder characterized by disruptions in thought processes, perceptions, emotional responsiveness, and social interactions.

Percentage

A mathematical concept that represents a fraction of 100 as a figure of merit or loss in comparison.

Psychotherapy

A form of treatment involving psychological techniques, designed to improve mental health and resolve or mitigate troublesome behaviors, beliefs, feelings, and somatic responses.

Schizophrenia

A chronic and severe mental disorder that affects a person's thoughts, feelings, and behavior, leading to a range of psychological symptoms, including delusions and hallucinations.