Mark Richards ltd enters an agreement to lease an asset from Michael Peterson ltd. The lease term is for seven years and the leased asset is initially recorded in mark Richards Ltd accounts as 250,000 at the date of lease inception. The asset is expected to have a useful life of eight years. The lease terms include a guaranteed residual of 200,000 and Mark Richards expects that the asset will have a residual value of $10,000 at the end of its useful life. Determine the lease depreciation expense assuming that:

a) Mark Richards ltd is expected to get ownership of the asset at the end of the lease term

B) is not expected to get ownership of the asset at the end of the lease term

(Chapter 11 - Q 29) - financial accounting 9th edition