12 B. $8,500 c. $11,500 D. $20,000 On December 31, Year 1, Sun Co. leased a new machine from Bright with the following pertinent information: Lease term 5 years Annual lease payment at beginning of each year $25,000 Useful life of machine 6 years Implicit interest rate in lease (known by Sun) 6% Present value factor of annuity due at 6% 4.47 Ownership of the machine transfers to Sun at the end of the lease term. In its December 31, Year 2, balance sheet, Sun should report a right-of-use asset equal to A. $89,400 B. $93,125 c. $100,000 D. $111,750 11050 13 A company enters into a 5-year operating lease agreement effective January 1, Year 1. The rent due on the last day of each year is $10,000. As an inducement to enter into the lease, the company received half off the first year's rent. The following information pertains to the company on January