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Benedict Company leased equipment to Mark Inc. on January 1, 2017. The lease is for...

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Accounting

Benedict Company leased equipment to Mark Inc. on January 1, 2017. The lease is for an eight-year period, expiring December 31, 2024. The first of eight equal annual payments of $600,000 was made on January 1, 2017. Benedict had purchased the equipment on December 29, 2016, for $3,200,000. The lease is appropriately accounted for as a sales-type lease by Benedict. Assume that at January 1, 2017, the present value of all rental payments over the lease term discounted at a 10% interest rate was $3,520,000.

Required:

What amount of interest income should Benedict record in 2018 (the second year of the lease period) as a result of the lease?

Interest Revenue= ????

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