What would the lessee record as annual depreciation on the

Reference no: EM13582130

Refer to the following lease amortization schedule. The 10 payments are made annually starting with the inception of the lease. Title does not transfer to the lessee and there is no bargain purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable.

Payment	Cash Payment	Effective Interest	Decrease in balance	Balance
				65,370
1	10,000		10,000	55,370
2	10,000	6,091	3,909	51,461
3	10,000	5,661	4,339	47,122
4	10,000	5,183	4,817	42,305
5	10,000	4,654	5,346	36,959
6	10,000	4,065	5,935	31,024
7	10,000	3,413	6,587	24,437
8	10,000	2,688	7,312	17,125
9	10,000	?	?	?
10	10,000	?	?	?

What would the lessee record as annual depreciation on the asset using the straight-line method? (Round your answer to the nearest dollar.)

Payment	Cash Payment	Effective Interest	Decrease in balance	Balance
				65,370
1	10,000		10,000	55,370
2	10,000	6,091	3,909	51,461
3	10,000	5,661	4,339	47,122
4	10,000	5,183	4,817	42,305
5	10,000	4,654	5,346	36,959
6	10,000	4,065	5,935	31,024
7	10,000	3,413	6,587	24,437
8	10,000	2,688	7,312	17,125
9	10,000	?	?	?
10	10,000	?	?	?

What would the lessee record as annual depreciation on the asset using the straight-line method? (Round your answer to the nearest dollar.)

Reference no: EM13582130

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