Happy Corporation leased a building from Sensor Company. The 10-year lease is recorded as a capital lease. The annual payments are $10,000 and the recorded cost of the asset is $67,100 . The straight-line method is used to calculate depreciation. Which of the following statements is true?
a. Depreciation expense of $6,710 will be recorded each year.
b. Depreciation expense of $10,000 will be recorded each year.
c. No depreciation expense will be recorded by Happy Corporation.
d. No interest expense will be recorded by Happy Corporation.
a
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