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Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to

Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Payment Cash Payment Effective Interest Decrease in balance Outstanding Balance 101,456 1 14,000 14,000 87,456 2 14,000 6,996 7,004 80,452 3 14,000 6,436 7,564 72,888 4 14,000 5,831 8,169 64,719 5 14,000 5,178 8,822 55,897 6 14,000 4,472 9,528 46,369 7 14,000 3,710 10,290 36,079 8 14,000 2,886 11,114 24,965 9 14,000 ? ? ? 10 14,000 ? ? ? What amount would the lessee record as annual amortization on the right-of-use asset using the straight-line method? (Round your answer to the nearest whole dollar.)

Multiple Choice

  • $8,746.

  • $10,146.

  • $14,000.

  • $10,210.

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