Essay
On January 1, 2016, Richardson Company leased equipment under a 3-year lease with payments of $8,000 on January 1, 2017, 2018, and 2019. The present value of the lease payments at a discount rate of 7% is $20,992. RIchardson uses straight-line depreciation with no salvage value. The lease is considered a capital lease. Calculate depreciation expense and interest expense for 2016.
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