Final answer:
Lease payments must be known to calculate the accurate balance of the right-of-use asset after two years, as they contain components of both principal and interest which together impact the asset’s value, which is not possible with the information provided.
Step-by-step explanation:
The balance in the right-of-use asset after two years for the Geron Company, based on the initial value and the interest rate provided, can be calculated by accounting for the amortization of the asset over the lease term. However, the lease payments which reduce the liability and thereby affect the right-of-use asset are not given. Without knowing the lease payment structure, we cannot accurately determine the balance of the right-of-use asset.
Typically, lease payments would be made that include both principal and interest components. The principal portion would reduce the liability and the corresponding asset. Since we don’t have the lease payment information or amortization schedule, we cannot derive the correct balance from the options provided.