Final answer:
After making the first lease payment, the balance in the right-of-use asset for Bentley Company at the end of 2024 would be $115,180, which is calculated by subtracting the annual lease payment from the initial right-of-use asset value.
Step-by-step explanation:
To determine the balance in the right-of-use asset at December 31, 2024, we need to account for both the initial measurement of the asset and the subsequent amortization over the lease term. At January 1, 2024, the right-of-use asset was recorded at $135,180. Since the lease payments are made at the beginning of each year, we need to reduce the right-of-use asset by the amount of the lease payment minus the interest that would have accrued during the year.
For the first year, the lease payment is $20,000. However, since the payment is made at the beginning of the year, there is no interest expense for this period. Consequently, the amortization for the year is simply the lease payment of $20,000. Therefore, the balance in the right-of-use asset at the end of 2024 is $135,180 - $20,000 = $115,180.
This calculation implies that the lease is accounted for as a financed purchase, and the asset value decreases by the amount of the lease payment since it's a prepayment that covers the entire period.