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Beta Company leased equipment from Summer Industries. The lease agreement qualifies as a finance lease...

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Accounting

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Beta Company leased equipment from Summer Industries. The lease agreement qualifies as a finance lease and requires annual lease payments of $60,000 over a five-year lease term (also the asset's useful life), with the first payment at January 1, 2018, the beginning of the lease. The interest rate is 8%. The asset being leased cost Summer $240,000 to produce. The total increase in earnings (pretax) on Summer's December 31, 2018, income statement would be O $34,626. O $28,652. O $21,393. O $15.898

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