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On January 1, 2014, ABC INC

Question 38

Multiple Choice

On January 1, 2014, ABC INC.leased a machine to MNO.The lease was for a 10-year period, which approximated the useful life of the machine.ABC INC.purchased the machine for $120,000 and expects to earn a 10 percent return on its investment, based upon an annual rental of $17,754 payable in advance each January 1st.Assuming that the lease was a direct financing lease, what should be the interest entry on ABC INC.'s books on December 31, 2014?


A) Please see the following table:
On January 1, 2014, ABC INC.leased a machine to MNO.The lease was for a 10-year period, which approximated the useful life of the machine.ABC INC.purchased the machine for $120,000 and expects to earn a 10 percent return on its investment, based upon an annual rental of $17,754 payable in advance each January 1st.Assuming that the lease was a direct financing lease, what should be the interest entry on ABC INC.'s books on December 31, 2014? A) Please see the following table: B) Please see the following table: C) Please see the following table: D) Please see the following table:
B) Please see the following table:
On January 1, 2014, ABC INC.leased a machine to MNO.The lease was for a 10-year period, which approximated the useful life of the machine.ABC INC.purchased the machine for $120,000 and expects to earn a 10 percent return on its investment, based upon an annual rental of $17,754 payable in advance each January 1st.Assuming that the lease was a direct financing lease, what should be the interest entry on ABC INC.'s books on December 31, 2014? A) Please see the following table: B) Please see the following table: C) Please see the following table: D) Please see the following table:
C) Please see the following table:
On January 1, 2014, ABC INC.leased a machine to MNO.The lease was for a 10-year period, which approximated the useful life of the machine.ABC INC.purchased the machine for $120,000 and expects to earn a 10 percent return on its investment, based upon an annual rental of $17,754 payable in advance each January 1st.Assuming that the lease was a direct financing lease, what should be the interest entry on ABC INC.'s books on December 31, 2014? A) Please see the following table: B) Please see the following table: C) Please see the following table: D) Please see the following table:
D) Please see the following table:
On January 1, 2014, ABC INC.leased a machine to MNO.The lease was for a 10-year period, which approximated the useful life of the machine.ABC INC.purchased the machine for $120,000 and expects to earn a 10 percent return on its investment, based upon an annual rental of $17,754 payable in advance each January 1st.Assuming that the lease was a direct financing lease, what should be the interest entry on ABC INC.'s books on December 31, 2014? A) Please see the following table: B) Please see the following table: C) Please see the following table: D) Please see the following table:

Correct Answer:

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