On January 1, 2016, Seaside Company leased equipment under a 5-year lease with payments of $3,000 on each December 31 of the lease term. The present value of the lease payments at a discount rate of 7% is $12,300. The lease is considered a capital lease. Calculate depreciation expense (straight-line with no salvage) and interest expense for 2016.

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The Answer of On January 1, 2016, Seaside Company leased equipment under a 5-year lease with payments of $3,000 on each December 31 of the lease term. The present value of the lease payments at a discount rate of 7% is $12,300. The lease is considered a capital lease. Calculate depreciation expense (straight-line with no salvage) and interest expense for 2016.

On January 1, 2016, Seaside Company Leased Equipment Under a 5-Year