Blue Co. recorded a right-of-use asset of $100,000 in a 10-year Type B lease. Payments of $16,275 are made annually at the end of each year. The interest rate charged by the lessor was 10%. Under the new ASU, the balance in the right-of-use asset after two years will be:
a. $80,000.
b. $86,823.
c. $100,000.
d. $121,000.