Previous Page Next Page Page 7 of 25 Question 7 (3 points) Fieldman Company purchased a machine for leasing purposes on January 1, 2020, for $1,000,000. On March 1, 2020, Fieldman leased the machine to Dahlia Company for $130,000 a year for a five-year period ending December 31, 2024, at which time, the machine reverts to Fieldman. Dahlia Company estimates the machine's useful life to be 10 years. Dahlia does not guarantee a residual value of the machine at lease-end. Dahlia paid $130,000 to Fieldman on January 1, 2020, the first annual lease payment. Dahlia is not aware of the implicit rate of the lease, but Dahlia's incremental borrowing rate is 5%. What was the lease expense recognized by Dahlia Company for the year ended December 31, 2020 if Dahlia Company classified this lease as an operating lease? $100,000 $118,195 $106,951 $130,000 Page 7 of 25 Previous Page Next Page MacBook Pro $ 4 % 5 & 7 8 9 0 6 3 0 P U R T E Y