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On January 1, 2022, Lopez Corp. enters into a six year lease for construction equipment. The equipment has a ten year useful life. The lease
On January 1, 2022, Lopez Corp. enters into a six year lease for construction 
On January 1, 2022, Lopez Corp. enters into a six year lease for construction equipment. The equipment has a ten year useful life. The lease transfers ownership of the equipment to Lopez at the end of the lease term, and Lopez appropriately classifies it as a finance lease. Lopez customarily depreciates similar assets on a straight line basis with no salvage value. The present value of the minimum lease payments is $241,000 at inception, and the first payment of $50,000 is made on January 1, 2022. How much amortization expense does Lopez report on its 2022 income statement equipment. The equipment has a ten year useful life. The lease transfers
ownership of the equipment to Lopez at the end of the lease term, and
Lopez appropriately classifies it as a finance lease. Lopez customarily
depreciates similar assets on a straight line basis with no salvage value.
The present value of the minimum lease payments is $241,000 at inception,
and the first payment of $50,000 is made on January 1, 2022. How much
amortization expense does Lopez report on its 2022 income statement?
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Intermediate Accounting Volume 2
Authors: Kin Lo, George Fisher
3rd Edition
0133865959, 978-0133865950
