Annual depreciation of XYZ company
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4. (1) XYZ Company leased equipment to West Corporation under a lease agreement that qualifies as a capital lease to West. The cost of the asset is $600,000. The expected economic life of the asset is ten years. The lease term is 5 years. Using the straight-line method, what would West record as annual depreciation?
A. $120,000.
B. $61,000.
C. $60,000.
D. $0.
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The response provides the steps to compute the Annual depreciation.
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