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On January 1, 20X4, Kangaroo Inc. (KI) entered into a lease agreement contract that entitled it to use equipment. Details of the contract follow: $85,000
On January 1, 20X4, Kangaroo Inc. (KI) entered into a lease agreement contract that entitled it to use equipment. Details of the contract follow: $85,000 $3,000 49 Lease payment, including maintenance agreement Maintenance agreement included in lease payment Implicit rate in the lease (not known) Incremental borrowing rate Lease term Economic life of equipment Guaranteed residual value Expected pay-out on residual value guarantee Option to purchase First annual payment due 596 6 years 7 years $20,000 $6,000 No Commencement date Kl's year-end is December 31. Kl elects to adopt the practical expedient available to it and not to separately report the lease and non- lease components in the contract. What is the amount that it will record for depreciation of this right-of-use asset for its year-ended December 31, 20X4? a $76,2476.577.988 c. $73,582 d. $65,355
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