Louie the lessee leased an asset for a threeyear lease term. Louie appropriately accounted for the lease
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Question:
Louie the lessee leased an asset for a three‐year lease term. Louie appropriately accounted for the lease as a finance lease and recorded a right‐of‐use asset for $45,000. The asset has a useful life of four years. How much amortization expense should Louie record each year?
Group of answer choices
- $15,000
- $11,250
- $0, for a finance lease, the lessor will record amortization expense for the right‐of‐use asset
- $0, Louie will record depreciation expense, not amortization expense.
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