Business, 06.08.2021 21:40 bionicboy03120440

On January 1, 2018, Ogleby Corporation signed a five-year noncancelable lease for equipment. The terms of the lease called for Ogleby to make annual payments of $180,000 at the beginning of each year for five years with title passing to Ogleby at the end of this period. The equipment has an estimated useful life of 7 years and no salvage value. Ogleby uses the straight-line method of depreciation for all of its fixed assets. Ogleby accordingly accounts for this lease transaction as a capital lease. The minimum lease payments were determined to have a present value of $750,578 at an effective interest rate of 10%. 1. With respect to this capitalized lease, for 2019 Ogleby should record
a. interest expense of $57,058 and depreciation expense of $107,225.
b. interest expense of $75,058 and depreciation expense of $107,225.
c. interest expense of $44,764 and depreciation expense of $107,225.
d. interest expense of $62,764 and depreciation expense of $107,225.

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On January 1, 2018, Ogleby Corporation signed a five-year noncancelable lease for equipment. The ter...

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