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2. ABC Company leased equipment to Best Corporation under a lease agreement that qualifies as a direct finance lease. The two companies agreed that the
2. ABC Company leased equipment to Best Corporation under a lease agreement that qualifies as a direct finance lease. The two companies agreed that the asset should be leased for $120,000. The lease contains a bargain purchase option that is effective at the end of the fifth year. The expected economic life of the asset is ten years. The lease term is 5 years. Using the straight-line method, what would Best Corporation record as annual depreciation?
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