On January 1, Year 4, Nori Mining Co. (lessee) entered into a 5-year lease for drilling equipment. The present value of the lease payments is $240,000. It includes a $10,000 present value of an option to purchase the equipment at the end of the lease term that Nori is reasonably certain to exercise. Nori estimates that the equipment's fair value will be $20,000 at the end of its 8-year life. Nori regularly uses straight-line amortization for similar equipment. For the year ended December 31, Year 4, what amount should Nori recognize as amortization expense on the right-of-use asset?

The CPA Financial Accounting and Reporting (FAR) section covers US GAAP, IFRS, and governmental accounting, focusing on financial statement preparation, balance sheet accounts, and complex transactions.

Key concepts include revenue recognition (ASC 606), leases (ASC 842), business combinations, bonds, inventory, and governmental accounting, with a 50/50 mix of MCQs and simulations.