Not Ordinary Drones (NOD) , Inc., a lessor, leased a drone to Worldz Information Network, Ltd., [WIN], a lessee, on January 1, 2019. The following information relates to the leased asset and the lease agreement:

Fair value of leased drone $Undisclosed

Lease 10 years

Useful life 15 years

Payment Due January 1

Payment frequency Annual

Annual Instalments starting January 1, 2019 $33,000

Estimated residual value at end of the lease, [as stated in the problem] $23,600

Interest rate implicit in the lease [unknown to the lessee] 7%

Interest rate incremental to the lessee 8%

Ownership of drone reverts to lessor at end of lease term

Year end for both companies December 31

Amortization method Straight line

Accounting standards used - NOD ASPE

- WIN IFRS

REQUIRED: Select the one best answer to each of the questions listed below and input it in the computer.

1-

Now assume for this Question that the lease agreement contained a bargain purchase option of $18,000 at the end of the lease term instead of a residual value of $23,600. Further assume that WIN recorded the leased asset at $285,488 on January 1, 2019. What would be the amount for depreciation expense which WIN would record in 2019? [Round to the nearest dollar].

a.

$26,749.

b.

$28,738.

c.

$17,833.

d.

$19,033.

e.

None of the above.