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Sandhill, Inc. leased equipment from Tower Company under a 4-year lease requiring equal annual payments...

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Accounting

Sandhill, Inc. leased equipment from Tower Company under a 4-year lease requiring equal annual payments of $424152, with the first payment due at lease inception. The lease does not transfer ownership, nor is there a bargain purchase option. The equipment has a 4-year useful life and no salvage value. Sandhill, Inc.s incremental borrowing rate is 10% and the rate implicit in the lease (which is known by Sandhill, Inc.) is 8%. Sandhill, Inc. uses the straight-line method to amortize similar assets.

What is the amount of amortization expense recorded by Sandhill, Inc. in the first year of the assets life? PV Annuity Due PV Ordinary Annuity 8%, 4 periods 3.57710 3.31213

10%, 4 periods 3.48685 3.16987

**Please show computations

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