QUESTIONS 08-11: R&R Company leased equipment from First Title Leasing Corp and the following Information is relevant: First Title Leasing purchased the equipment for $600,000 Annual payments beginning 1/1/X1 Annual payments equal $110,000 Thereafter payments for the next calendar year will be made on this date each year December 31 Lease term 5 Estimated economic life 6 Discount/Interest Rate 4% Year end December 31 The lease is non-cancelable First Title Leasing routinely leases this type of equipment 8. This lease will be considered a finance lease from the lessee's perspective because it meets which criterion? O A. The lease term is for the major part of the estimated economic life of the asset OB. The present value of the lease payments is equal to or greater than "substantially all of the fair value of the asset OC. Both Answers A and B OD. This lease will actually be treated as an operating lease for accounting purposes D Question 9 2.5 pts [USE THE INFORMATION FROM QUESTION 48] 9. What is the amount the Right of Use Asset account should be debited for on 1/1/X1 when the lease is started? Enter the amount without any symbols as a positive value. D Question 10 2.5 pts [USE THE INFORMATION FROM QUESTION #8] 10. What is the Lessee's journal entry for the 12/31/X2 lease payment? O A. Debit Lease Payable for $110,000 and Credit Cash for $110,000 OB. Debit Lease Payable for $97.790, Debit Interest Expense for $12,210, and Credit Cash $110,000 O C. Debit Lease Payable for $90,412,Debit interest Expense for $19,598, and Credit Cash $110,000 O D. Debit Lease Payable for $114,400 and Credit Cash for $114.400 D Question 11 2.5 pts [USE THE INFORMATION FROM QUESTION #8) 11. What is the journal entry the Lessor will book for annual depreciation of the leased asset? O A. No journal entry is necessary as the Lessor must derecognize the asset O B. Debit Depreciation Expense for $100.000 and Credit Accumulated Depreciation for $100,000 C. Debit Depreciation Expense for $120,000 and Credit Accumulated Depreciation for $120,000 O D. Debit Depreciation Expense for $84,882 and Credit Accumulated Depreciation for $84,882