aq.brgd.short.term.op.005_0818 On 1/31/Y1, Bailey Company leased a new machine from Sussex Corp. The following data relate to the lease transaction at its inception: Present value of an annuity of 1 in advance for 10 periods 6.76 at 10% Present value of annuity of 1 in arrears for 10 periods at 6.15 10% Fair value of the machine Straight line Depreciation method The lease has no renewal option, the possession of the machine reverts to Sussex when the lease terminates, and the machine does have alternative uses. The first lease payment of $50,000 is paid at the inception of the lease. What amount does Sussex Corp. report for depreciation expense in year 1 ? $0. Because Bailey, the lessee records a lease liability, Bailey also records depreciation expense. $26,667 $33,800