Derozan Corp. manufactured equipment at a cost of $167,770 and leased it to B Corp. on January 1, 2019 for an eight-year period expiring December 31, 2026. The asset’s economic life is 10 years. Equal payments under the lease are $46,930 and are due on January 1 of each year. The first payment was made on January 1, 2019. The implicit rate used by Derozan is 8%.

Additional information:                                           

Present value of an annuity due of $1 for 8 periods at 8%          6.21                                      

Present value of an annuity due of $1 for 16 periods at 4%       12.12                                       

What is the amortization expense B will take for the year ended December 31, 2019?

Answer rating: 100% (QA)

Sol Given thaly Equal payments under the lease ... View the full answer