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Eubank Company, as lessee, enters into a lease agreement on July 1, 2014, for equipment. The...

Eubank Company, as lessee, enters into a lease agreement on July 1, 2014, for equipment. The following data are relevant to the lease agreement: 1. The term of the non-cancelable lease is 4 years, with no renewal option. Payments of $782,757 are due on July 1 of each year. 2. The fair value of the equipment on July 1, 2014 is $2,800,000. The equipment has an economic life of 6 years with no salvage value. 3. Eubank amortize the right of use using the straight-line method. 4. The lessee pays all executory costs. 5. The lessee is aware that the lessor used an implicit rate of 8% in computing the lease payments. 12. How much is the amortization expense from the right of use asset for year 2014? a. $2,800,000. b. $1,400,000. c. $700,000. d. $350,000. Answer: D

Please show why the answer is D

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