If Jacobs Eatery elected the short-term lease option. What the effect of the lease on Jacobs Eatery's earnings during the eight-month term will be : An expense of $20,000 at the end of each of eight months.
Since the lease term is eight months which as well include a monthly payments of the amount of $20,000 that is due at the end of each month.
Hence, the effect of the lease on Jacobs Eatery's earnings during the eight-month term will be an expense of the amount of $ 20,000 at the end of each month.
This $20,000 will be for the duration of the eight month term reason been that the expense amount of $20,000 is an expense for recognition and all the payments are qualify for deduction.
Inconclusion if Jacobs Eatery elected the short-term lease option. What the effect of the lease on Jacobs Eatery's earnings during the eight-month term will be : An expense of $20,000 at the end of each of eight months.
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