Multiple Choice Question 96 Pharoah Co. purchases land and constructs a service station and car wash for a total of $480000. At January 2, 2018, when construction is completed, the facility and land on which it was constructed are sold to a major oil company for $520000 and immediately leased from the oil company by Pharoah. Fair value of the land at time of the sale was $48000. The lease is a 10-year, noncancelable lease. Pharoah uses straight-line depreciation for its other various business holdings. The economic life of the facility is 15 years with zero salvage value. Title to the facility and land will pass to Pharoah at termination of the lease. A partial amortization schedule for this lease is as follows: Payments Interest Amortization Balance Jan. 2, 2018 $520000.00 $84627.61 Dec. 31, 2018 $52000.00 $32627.61 487372.39 84627.61 48737.24 35890.37 451482.02 Dec. 31, 2019 84627.61 45148.20 39479.41 412002.61 Dec. 31, 2020 The total lease-related expenses recognized by the lessee during 2019 is $95937 $83467 $84628 $80204 Multiple Choice Question 67 Cullumber Corporation is a lessee with a capital lease. The asset is recorded at $680000 and has an economic life of 8 years. The lease term is 5 years. The asset is expected to have a fair value of $190000 at the end of 5 years, and a fair value of $45000 at the end of 8 years. The lease agreement provides for the transfer of title of the asset to the lessee at the end of the lease term. What amount of depreciation expense would the lessee record for the first year of the lease? $127000 $136000 $98000 $79375