International Corporation leased a building from Domestic Company. The 10-year lease is recorded as a capital lease. The annual payments are $10,000 and the recorded cost of the asset is $67,100. The straight-line method is used to calculate depreciation. Which of the following statements is true?
A) Depreciation expense of $6,710 will be recorded each year by International Corporation.
B) Depreciation expense of $10,000 will be recorded each year by International Corporation.
C) No depreciation expense will be recorded by International Corporation.
D) No rent expense will be recorded by International Corporation.
Correct Answer:
Verified
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