Cady Salons Leased Equipment from Smith Co

Cady Salons leased equipment from Smith Co. on January 1, 2018, in an operating lease. The present value of the lease payments discounted at 10% was $80,000. Ten annual lease payments of $12,000 are due at each January 1 beginning January 1, 2018. The amortization of the right-of-use asset for the reporting year ending December 31, 2018, would be:

A) $ 5,200.
B) $ 6,800.
C) $ 8,000.
D) $12,000.

Correct Answer:

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