Question

WVA Mining Company has leased a machine from Franklin Machinery Company. The annual payments are $6,000, and the life of the lease is 8 years. It is estimated that the useful life of the machine is 9 years. How would WVA record the acquisition of the machine?
a. The machine would be recorded as an asset with a cost of $54,000.
b. The company would not record the machine as an asset but would record rent expense of $6,000 per year.
c. The machine would be recorded as an asset, at the present value of $6,000 for nine years.
d. The machine would be recorded as an asset, at the present value of $6,000 for eight years.


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  • CreatedSeptember 22, 2015
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