Hyde Company Leased Equipment to Pittman Corporation Under a Six

True/False

Hyde Company leased equipment to Pittman Corporation under a six year lease agreement that qualifies as a direct financing lease.The asset cost $160,000.The lease contains a bargain purchase option that is effective at the end of the sixth year.The asset has an expected economic life of 12 years and is expected to have a residual value of $4,000 at the end of the 12th year.Assuming that straight-line depreciation is used,what would be the annual depreciation?
A)$26,000
B)$26,667
C)$13,333
D)$13,000