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On January 1 Gregory Company signed a tenyear noncancelable lease for a new machine requiring$40000 annual payments at the beginning of each year The machine has a useful life of 15 years

On January 1, Gregory Company signed a ten-year noncancelable lease for a new machine, requiring$40,000 annual payments at the beginning of each year. The machine has a useful life of 15 years, withno salvage value. Title passes to Gregory at the lease expiration date. Gregory uses straight-line depre-ciation for all of its plant assets. Aggregate lease payments have a present value on January 1 of$252,000, based on an appropriate rate of interest. For the first year, Gregory should record depreci-ation (amortization) expense for the leased machine ata.$40,000.b.$25,200.c.$16,800.d.$14,133

 

Mar 20 2020 Read more Less More

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