Answer: $624000
Explanation:
From the question, we are informed that Warren Co. recorded a right-of-use asset of $780,000 in a 10-year finance lease and that the interest rate charged by the lessor was 10%.
The balance in the right-of-use asset after 2 years will be calculated as:
= $780,000 - [($780,000/10) × 2]
= $780,000 - ($78000 × 2)
= $780,000 - $156,000
= $624000
