On January 2, 2021, Carla Vista, Inc. signed a 10-year noncancelable lease for a heavy duty drill press. The lease stipulated annual payments of $370000 starting at the beginning of the first year, with title passing to Carla Vista at the expiration of the lease. Carla Vista treated this transaction as a finance lease. The drill press has an estimated useful life of 15 years, with no salvage value. Carla Vista uses straight-line amortization for all of its plant assets. Aggregate lease payments were determined to have a present value of $2179016, based on implicit interest of 11%. In its 2021 income statement, what amount of amortization expense should Carla Vista report from this lease transaction? O $182268 O $217902 O $370000 O $145268

On January 2, 2021, Carla Vista, Inc. signed a 10-year noncancelable lease for a heavy duty drill press. The lease stipulated annual payments of $370000 starting at the beginning of the first year, with title passing to Carla Vista at the expiration of the lease. Carla Vista treated this transaction as a finance lease. The drill press has an estimated useful life of 15 years, with no salvage value. Carla Vista uses straight-line amortization for all of its plant assets. Aggregate lease payments were determined to have a present value of $2179016, based on implicit interest of 11%. In its 2021 income statement, what amount of amortization expense should Carla Vista report from this lease transaction? O $182268 O $217902 O $370000 O $145268

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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