How much should Company B record as the right-of-use asset on the start date of the lease?

To determine the amount that Company B should record as the right-of-use asset at the start date of the lease, it is essential to consider the present value of the lease payments that the company is obligated to make over the lease term. Under accounting standards for lease accounting, the right-of-use asset is typically measured at the present value of future lease payments, adjusted for any initial direct costs, lease incentives, or prepaid lease payments.

In this case, calculating the present value involves discounting the future lease payments using an appropriate discount rate, which reflects the company's borrowing cost or an interest rate implied in the lease. As a result, the right-of-use asset will represent not only the total contractual payments but also factor in the timing of those payments—typically over the lease's term.

If the calculation leads to the amount of $51,604, it would indicate that this figure accurately reflects the total present value of the required lease payments when considering the relevant interest rate and lease term. This amount would be recorded as both the right-of-use asset and the corresponding lease liability on the balance sheet at the beginning of the lease term.

Thus, the correct figure to record as the right-of-use asset is $51,604, reflecting a proper understanding of lease