On January 2, 2012, Tech Metals Co leased a mining machine from BX Leasing Corporation. The lease qualifies as an operating lease. The annual payments are $50,000 at the end of each year, and the life of the lease is 10 years. What entry would Tech Metals Co make when the machine is delivered by BX Leasing Corporation.?
A) Machine 500,000Lease Obligation 500,000
B) Prepaid Rent 250,000Lease Obligation 250,000
C) Rent Expense 50,000Cash 50,000
D) No entry is necessary.
D
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