Find what is the amount of riverwood ltd annual depreciation

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Question 1: Whiterun Ltd owned a boat that has an economic useful life of 6 years as at 1 July 2020. On 1 July 2020 the company leased the boat to Riverwood Ltd for three years. Whiterun Ltd recognised this lease as a finance lease and recorded a lease receivable valued at $58 784. In the lease agreement, Riverwood Ltd agreed to guarantee the full estimated $5 000 residual value. Lease payments are to be made annually and in arrears. The interest rate implicit in the lease for Riverwood Ltd is 5%. What is the amount of Riverwood Ltd's annual depreciation expense?

a) $17,928

b) $19,595

c) There has not been enough information provided to accurately determine this

d) $12,928

Reference no: EM132608781

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