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A lessee with a lease containing a bargain purchase option should depreciate the leased asset over the asset's remaining economic life. term of the lease. a. b. c. d. life of the asset or the term of the lease, whichever is shorter. life of the asset or the term of the lease, whichever is longer 10) Most Co as a lessee records a financel lease of machinery on 1/1/14. The 7 annual lease payments of $210,000 are made at the end of each year. The present value of the lease payments at 10% is $1 022,400. Most uses straight line depreciation. The life of the machine is 8 years (no residual value). At the end of the lease, Most must return the machine to the lessor. The reduction of the lease liability at 12/31/14 is a. $222,000 b. $210,000 c. $119,760 d. $107,760 e $102,240