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On January 1, Cutlip Corp. signed a 8-year lease for equipment having a 10 years economic life. The present value of the monthly lease payments
On January 1, Cutlip Corp. signed a 8-year lease for equipment having a 10 years economic life. The present value of the monthly lease payments equal 80% of the equipments fair value. The lease agreement for neither a transfer of title to Cutlip nor a bargain purchase option. In the income statement during the first year of the lease, Cutlip will report:
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Lease expense and interest expense
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Amortization expense and interest expense
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Lease expense
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Lease expense and amortization expense
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