E21-14 (LO2,3) (Operating Lease for Lessee and Lessor) On February 20, 2017, Barbara Brent Inc....
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E21-14 (LO2,3) (Operating Lease for Lessee and Lessor) On February 20, 2017, Barbara Brent Inc. purchased a machine for 1,500,000 for the purpose of leasing it. The machine is expected to have a 10-year life, no residual value, and will be depreciated of s19,500. There is no provision for the renewal of the lease or purchase of the machine by the lessee at the expiration of the lease term. Brent paid $30,000 of commissions associated with negotiating the lease in February 2017 Instructions (a) What expense should Rudy Company record as a result of the facts above for the year ended December 31, 20177 Show supporting computations in good form. What income or loss before income taxes should Brent record as a result of the facts above for the year ended December 31, 2017? (Hint: Amortize commissions over the life of the lease.) (b)
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