On January 2, year 1, Nori Mining Co. (lessee) entered into a five-year lease for drilling equipment. Nori accounted for the acquisition as a capital lease for $240,000, which includes a $10,000 bargain purchase option. At the end of the lease, Nori expects to exercise the bargain purchase option. Nori estimates that the equipment’s fair value will be $20,000 at the end of its eight-year life. Nori regularly uses straight-line depreciation on similar equipment. For the year ended December 31, year 1, what amount should Nori recognize as depreciation expense on the leased asset?