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Eglin Company leased equipment with an eight-year useful life from Hatch Enterprises on August 1, 2019. The lease, which qualifies as a finance lease because
Eglin Company leased equipment with an eight-year useful life from Hatch Enterprises on August 1, 2019. The lease, which qualifies as a finance lease because the contract includes a transfer of ownership of the equipment to Eglin at the end of the five-year lease term, calls for annual lease payments starting on August 1, 2019. The right-of-use asset was originally recorded at $183,000. Eglin's fiscal year ends on December 31. Hatch's implicit rate of return for this lease is 9%. Calculate Eglin's amount of amortization expense on the right-of-use asset for 2019. Do not round intermediate calculations.
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