Business, 06.12.2021 20:10 victorialeverp714lg

On January 1, 2021, Wildhorse Corporation signed a 5-year noncancelable lease for equipment. The terms of the lease called for Wildhorse to make annual payments of $209000 at the beginning of each year for 5 years beginning on January 1, 2021 with the title passing to Wildhorse at the end of this period. The equipment has an estimated useful life of 7 years and no salvage value. Wildhorse uses the straight-line method of depreciation for all of its fixed assets. Wildhorse accordingly accounts for this lease transaction as a finance lease. The lease payments were determined to have a present value of $886101 at an effective interest rate of 9%. In 2021, Wildhorse should record interest expense of:. a. $60939.
b. $79749.
c. $129251.
d. $148061.

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On January 1, 2021, Wildhorse Corporation signed a 5-year noncancelable lease for equipment. The ter...

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