On January 1, 2022, Shadow Industries (lessor) leased equipm…

On January 1, 2022, Shadow Industries (lessor) leased equipment to Bone Co. (lessee) for a 5-year period under a non-cancelable agreement, after which the leased asset will revert back to Shadow Industries. The equipment costs Shadow industries $840,000 and normally sells for $1,116,581. Equal payments under the lease are $240,000 and are due on December 31 of each year, with the first payment made on January 1, 2022. The equipment has a useful life of 6 years. The equipment’s residual value is $120,000 at the end of the lease term The rate implicit in the lease used by the lessor is 8%, Bone Co.’s incremental borrowing rate is 10% and lessee is aware of lessor’s rate.   What amount would Bone record for the lease payable and right-of-use asset at inception of the agreement?     

Beats Corporation constructed a machine at a total cost of $…

Beats Corporation constructed a machine at a total cost of $206 million. Construction was completed at the end of 2020 and the machine was placed in service at the beginning of 2021. The machine was being depreciated over a 10-year life using the sum-of-the-years’-digits method. By that method, accumulated depreciation at the end of 2023 is $97.2 million. The residual value is expected to be $8.0 million. At the beginning of 2024, Beats decided to change to the straight-line method. Ignoring income taxes, what will be Beats’ depreciation expense for 2024? Do not round intermediate calculations.