Refer to the following lease amortization schedule. The five payments are made annually starting with the beginning of the lease. A $2,500 purchase option is reasonably certain to be exercised at the end of the five-year lease. The asset has an expected economic life of eight years. Lease Payment Effective Decrease in Outstanding Cash Payment Interest Balance Balance $ 43,900 1 $ 9,600 ?? ?? 34,300 2 9,600 $ 2,401 $ 7,199 27,101 3 9,600 1,897 7,703 19,398 4 9,600 1,358 8,242 11,156 5 9,600 ?? ?? ?? 6 $ 2,500 $ 164 $ 2,336 $ 0 What amount would the lessee record as annual amortization on the asset using the straight-line method, assuming no residual value? Note: Round your answer to the nearest whole dollar. Multiple Choice $8,780
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