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On Feb 20 2011 Hooke Inc purchased a machine for $1200000 for the purpose of leasing it. The machine is epected tohave a 10 year life ,noresidual value and will be depreciated on the straightline basis. The machine was leased to Sage company on March 01 2011 for a 4 year period at monthly rental of $15600. There is no provision for the renewal of the lease or purchase of the machine by the lessee at the expiration of the lease term. Hooke paid n$ 30000 of commissions associated with negotiating the lease in Feb 2011

A. What expense shoukd sage record as a result of the facts above for the year ended DEC 31 2011,show supporting computations in good form.

B. What income or loss before income taxes should hooke record as a result for the facts above for the year ended DeC 31 2011

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9439717

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