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
								108,703
1		15,000				15,000		93,703
2		15,000		7,496		7,504		86,200
3		15,000		6,896		8,104		78,096
4		15,000		6,248		8,752		69,343
5		15,000		5,547		9,453		59,891
6		15,000		4,791		10,209		49,682
7		15,000		3,975		11,025		38,656
8		15,000		3,093		11,907		26,749
9		15,000		?		?		?
10		15,000		?		?		?

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 dollar.)

Multiple Choice

• $9,370.

• $15,000.

• $10,870.

• $10,934.