Multiple Choice
Nanotech Inc.leased a new machine having an expected useful life of 20 years from Union Co.Terms of the noncancelable 15-year lease were that Nanotech would gain title to the property upon payment of a sum equal to the fair market value of the machine at the termination of the lease.Nanotech accounted for the lease as a capital lease and recorded an asset and a liability in the financial records.The asset recorded under this lease should properly be amortized over
A) 5 years (the period of actual ownership) .
B) 15 years (75 percent of the 20-year asset life) .
C) 20 years (the total asset life) .
D) 15 years (the term of the lease) .
Correct Answer:
Verified
Correct Answer:
Verified
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