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How much amortization is recorded on the right-of-use asset

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Reference no: EM132865797

Problem - Leewin Brokerage enters into a lease agreement with Bumble Motors to lease an automobile with a fair value of ?$71, 000 under a 5-year lease on December? 20, 2018. The lease commences on January? 1, 2019, and Leewin will return the automobile to Bumble on December? 31, 2023. The automobile has an estimated useful life of 7 years. Leewin made a lease payment of $ 10, 800 on December? 20, 2018. In? addition, the lease agreement stipulates annual payments of $ 10, 800?, due on January 1 of? 2019, 2020,? 2021, 2022, and 2023. The implicit rate of the lease is 4?% and is known by Leewin. There is no purchase? option, no lease? incentives, no residual value? guarantees, and no transfer of ownership. Leewin incurs initial direct costs of $ 1, 900.

Assuming that this is classified as an operating? lease, how much amortization is recorded on the right-of-use asset in? 2019?

Reference no: EM132865797

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