efer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Payment Cash Payment Effective Interest Decrease in balance Outstanding Balance 101,385 1 15,000 15,000 86,385 2 15,000 8,639 6,361 80,024 3 15,000 8,002 6,998 73,026 4 15,000 7,303 7,697 65,329 5 15,000 6,533 8,467 56,862 6 15,000 5,686 9,314 47,548 7 15,000 4,755 10,245 37,303
Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable.
|
Payment |
Cash |
Effective |
Decrease |
Outstanding Balance |
|||||
|
|
|
|
|
|
|
|
|
101,385 |
|
|
1 |
|
15,000 |
|
|
|
15,000 |
|
86,385 |
|
|
2 |
|
15,000 |
|
8,639 |
|
6,361 |
|
80,024 |
|
|
3 |
|
15,000 |
|
8,002 |
|
6,998 |
|
73,026 |
|
|
4 |
|
15,000 |
|
7,303 |
|
7,697 |
|
65,329 |
|
|
5 |
|
15,000 |
|
6,533 |
|
8,467 |
|
56,862 |
|
|
6 |
|
15,000 |
|
5,686 |
|
9,314 |
|
47,548 |
|
|
7 |
|
15,000 |
|
4,755 |
|
10,245 |
|
37,303 |
|
|
8 |
|
15,000 |
|
3,730 |
|
11,270 |
|
26,033 |
|
|
9 |
|
15,000 |
|
? |
|
? |
|
? |
|
|
10 |
|
15,000 |
|
? |
|
? |
|
? |
|
What amount would the lessee record as annual amortization on the right-of-use asset using the straight-line method? (Round your answer to the nearest whole dollar.)
- $10,139.
- $8,638.
- $15,000.
- $10,203.
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