On January 1, 2021, Freshbooks Industries Signed an 18-Year Lease

Multiple Choice

On January 1, 2021, Freshbooks Industries signed an 18-year lease for heavy equipment. The lease is accounted for by Freshbooks as a finance lease. The lease required annual payments of $19,000 beginning December 31, 2021. The heavy equipment has an estimated useful life of 20 years, with $2,000 residual value. Freshbooks uses straight-line depreciation for all its plant assets. The lease payments have a present value of $159,000, based on a 10% interest rate
-How much depreciation expense should Freshbooks report for the lease on its 2021 income statement?

A) $7,850
B) $8,833
C) $8,722
D) $15,900
E) $8,722.