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On December 31, 2021, Perry Corporation leased equipment to Admiral Company...

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Accounting

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On December 31, 2021, Perry Corporation leased equipment to Admiral Company for a five-year period. The annual lease payment, excluding nonlease components, is $43,000. The interest rate for this lease is 13%. The payments are due on December 31 of each year. The first payment was made on December 31, 2021. The normal cash price for this type of equipment is $160,000 while the cost to Perry was $134,000. For the year ended December 31, 2021, by what amount will Perry's earnings increase due to this lease (Ignore taxes)

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