Question: TB MC Qu . 1 5 - 7 2 ( Static ) XYZ Company leased equipment... XYZ Company leased equipment to West Corporation under a

TB MC Qu

. 15 - 72 (

Static

)

XYZ Company leased equipment...

XYZ Company leased equipment to West Corporation under a lease agreement that qualifies as a finance lease to West, but not as a result of a bargain purchase option or a title transfer. The present value of the

lease payments is $

600, 000 .

The expected economic life of the asset is seven years. The lease term is five years. Using the straight

-

line method, what would West record as annual amortization?

Multiple Choice

120, 000

85, 714

60, 000

0

TB MC Qu.15-72(Static) XYZ Company leased equipment... XYZ Company leased equipment

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