I Lasch Co

Multiple Choice

I. Lasch Co. recorded a right-of-use asset of $200,000 in a 10-year operating lease. Payments of $32,550 are made annually at the end of each year. The interest rate charged by the lessor was 10%. The balance in the right-of-use asset after the first year will be:

A) $180,000.
B) $187,450
C) $188,450.
D) $200,000.