ABC Company leased a tooling machine on January 1, 2018, for a four-year period ending December 31, 2021. The lease agreement specified annual payments of $25,000 beginning with the first payment at the beginning of the lease, and each December 31 through 2020. The company had the option to purchase the machine on December 30, 2021, for $16,000 when its fair value was expected to be $24,000 a sufficient difference that exercise seems reasonably certain. The machine's estimated useful life was six years with no salvage value. ABC was aware that the lessors implicit rate of return was 10%. The amortization of the right-of-use asset in 2018 ABC income statement should be:

a. $15,475 b. $20,645 c. $16,350 d. $24,500