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What would New Mexico record as annual amortization expense

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Question - New Mexico Corporation leased equipment under an agreement that qualifies as a finance lease. The present value of the minimum lease payments is $120,000The 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

Reference no: EM132510402

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