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On January 1, 2020, Kerr Company signed a 10-year noncancelable lease for new equipment, requiring $20,000 annual payments at the beginning of each year. The equipment has a useful life of 15 years, with no salvage value. Title passes to Kerr at the lease expiration date. At the lease commencement, Kerr records a right-of-use asset and a lease liability of $126,000, based on an appropriate rate of interest. For 2020, Kerr should record amortization on its right-of-use asset ofSelect one:a. $20,000b. $12,600c. $8,400d. $0
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