Part 2: At January 1, 2023, Beaver Company leased a machine from Zipper Manufacturer. The following information pertains to the lease:

3 years

Lease term

Annual lease payments beginning January 1, 2023 and at each December 31 thereafter through 2024

$90.000

$257.347

Present value of lease payments at 5%

Zipper Manufacturer's implicit rate (known by Beaver)

5%

On December 31, 2025, the machine reverts back to Zipper. Both companies use straight-line depreciation/amortization.

Assume useful life of machine is 5 years. Fair value of equipment is $400,000. The lease is classified as an

operating lease:

6. What is the balance of right-of-use asset that Beaver will report in its balance sheet at December 31, 2023?