New Mexico Corporation leased equipment under an agreement that qualifies as a

finance lease. The present value of the minimum lease payments is

$120,000. The lease

term is five years. After the expiration of the five year lease, the lease contains a bargain

purchase option. The expected economic life of the asset is eight years. Using the

straight

-

line method, what would New Mexico record as a

nnual amortization expense on

this leased equipment?

A)

$24,000

B)

$15,000

C)

$12,000

D)

$30,000