$9$

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?

$00-53\mathrm{.}06$

Multiple Choice

$$120,000$

$$85,714$

$$60,000$

$$0$