1. On January 1, 2019, WIWL, Inc. signed a 6 year lease. WIWL, Inc. will make payments of $73,125 each year on January 1st, with the first payment made on the day the lease was signed. If the lease payments had an initial present value of $350,326 and WIWL, Inc.'s incremental interest rate is 10%, how much interest expense will the company recognize on its 2019 income statement from this finance lease? (IO 20 & 22)

   		$0
   		$27,720
   		$35,033
   		$73,125

5 points

QUESTION 28

1. (5 points) Steling, Inc. is a lessee with a finance lease that includes a transfer of title to Steling, Inc. when the lease ends. The asset was recorded at $2,700,000 and has an economic life of 20 years. The lease term is 5 years. The asset is expected to have a market value of $540,000 at the end of the lease and of $54,000 at the end of the economic life. how much depreciation expense should Steling, Inc. record for the first year of the lease? (IO 20)

   		$529,200
   		$432,000
   		$132,300
   		$108,000

5 points

QUESTION 29

1. (5 points) On January 1, 2020, GGS Corp. signed a 10 year lease on an asset with a 15 year economic life. The lease doesn't transfer ownership or have a BPO. If the lease payments had an initial present value of $1,637,381 and GGS Corp.'s incremental interest rate is 7%, how much amortization expense will the company recognize on its 2020 income statement from this finance lease? (IO 20 & 22)

   		$217,875
   		$163,738
   		$109,159
   		$0

5 points

QUESTION 30

1. (5 points) JTF, Inc. leased machinery with a market value of $23,413,000 to a new client on January 1, 2020. Equal annual payments of $2,588,990 are due on January 1 of each year for 12 years, beginning on the day the lease was signed. JTF, Inc. used a 8% interest rate for the lease. Assuming that the lease is appropriately recorded as a sales-type lease by JTF, Inc., what amount of interest revenue would the company record on the lease for 2020? (IFO 18)

   		$156,087
   		$1,665,921
   		$1,873,040
   		$2,080,159