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On January 1, 2017, Yuber Company signed a seven-year noncancelable lease for a limousine. The terms of the lease called for Yuber to make annual
On January 1, 2017, Yuber Company signed a seven-year noncancelable lease for a limousine. The terms of the lease called for Yuber to make annual payments of $46,875 at the beginning of each year for seven years with title passing to Yuber at the end of this period. The limousine has an estimated useful life of 9 years and no salvage value. Yuber uses the straight-line method of depreciation for all of its fixed assets. Yuber accordingly accounts for this lease transaction as a capital lease. The minimum lease payments were determined to have a present value of $292,500 at an effective interest rate of 4%. With respect to this capitalized lease: What should Yuber record as interest and depreciation expense for year 2017? [3 points) A What should Yber record as interest and depreciation expense for year 2018? (4 points) A What should be the balance of the total lease obligation under capital leases on Yber's books in January of 2019 after the annual lease payment was made? [4 points]: [3 points) A
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