On January 1 . Landau Company signed a ten-year noncancelable lease for a new machine, requiring $45,000 annual payments at the beginning of each year. The machine has a useful life of 1 . years, with no salvage value. Title passes to Landau at the lease expiration date. Landau uses straight-line depreciation for all of its plant assets. Aggregate lease payments have a present value on January 1
of $352,000, based on an appropriate rate of interest. For the first year, Landau should record depreciation (amortization) expense for the leased machine at
a. $45,000
b. $35,200
c. $23,467
d. $21,533
C
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