Multiple Choice
Hydra Company entered into a direct-financing lease with Bridges Company for the use of an asset which cost Hydra $195,000.The lease agreement contained a bargain purchase option effective immediately after the fifth rental,which provided that Bridges could purchase the asset at that time.The estimated life of the asset was 10 years with an estimated residual value of $500.Assuming that Bridges uses straight-line depreciation,Bridges's annual depreciation expense would be
A) $19,500
B) $19,450
C) $19,550
D) $19,000
Correct Answer:
Verified
Correct Answer:
Verified
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