Parlor Company manufactures equipment that they sell or lease. On December 31, 20X4, Parlor leased equipment to Liner Company for a five-year period after which ownership of the leased asset will be transferred to Liner. The lease calls for equal annual payments of $60,000, due on December 31 of each year. The first payment was made on December 31, 20X4. The normal sales price of the equipment is $320,000, and cost is $276,000.
For the year ended December 31, 20X4, what amount of income should Parlor report from the lease transaction?
- $74,000
- $30,000
- $44,000
- $10,000