On January 2, 2021, Ivanhoe, Inc. signed a 10-year noncancelable lease for a heavy duty drill press. The lease stipulated annual payments of $200000 starting at the beginning of the first year, with title passing to Ivanhoe at the expiration of the lease. Ivanhoe treated this transaction as a finance lease. The drill press has an estimated useful life of 15 years, with no salvage value. Ivanhoe uses straight-line amortization for all of its plant assets. Aggregate lease payments were determined to have a present value of $1283532, based on implicit interest of 9%. In its 2021 income statement
On January 2, 2021, Ivanhoe, Inc. signed a 10-year noncancelable lease for a heavy duty drill press. The lease stipulated annual payments of $200000 starting at the beginning of the first year, with title passing to Ivanhoe at the expiration of the lease. Ivanhoe treated this transaction as a finance lease. The drill press has an estimated useful life of 15 years, with no salvage value. Ivanhoe uses straight-line amortization for all of its plant assets. Aggregate lease payments were determined to have a present value of $1283532, based on implicit interest of 9%.
In its 2021 income statement, what amount of amortization expense should Ivanhoe report from this lease transaction?
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