Q)New Mexico Corporation leased equipment under an agreement that qualifies as a finance lease. The present value of the minimum lease payments is $120,000. The lease term is five years. After the expiration of the five year lease, the lease contains a bargain purchase option. The expected economic life of the asset is eight years. Using the straight-line method, what would New Mexico record as annual amortization expense on this leased equipment? A) $24,000 B) $15,000 C) $12,000 D) $30,000

Q) On August 1, 2017, Missouri Corporation issued $10 million of 8% nonconvertible bonds at 104. The bonds mature in 20 years. Each $1,000 bond was issued with 20 detachable stock warrants. Each warrant entitles the holder to purchase, for $50, one share of Missouri Corporation's $1 par common stock. On August 1, 2017, the market value per share for Missouri's stock was $46 and the market value of each warrant was $6. The market price of the bonds cannot be clearly determined. Total proceeds allocated to the stock warrants are: A) $1,200,000 B) $200,000 C) $400,000 D) $460,000