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On January 1, Twix Company as lessee signed a ten-year noncancelable lease for a machine with an-nual payments of $60,000. The first payment was also
On January 1, Twix Company as lessee signed a ten-year noncancelable lease for a machine with an-nual payments of $60,000. The first payment was also made on January 1. Twix appropriately treatedthis transaction as a capital lease. The ten lease payments have a present value of $405,000 at January1, based on implicit interest of 10 percent. For the first year, Twix should record interest expense ofa.$0.b.$6,000.c.$34,500.d.$40,500.
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