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Fanny leased equipment that had a retail cash selling price of $1,250,000 and...

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Accounting

Fanny leased equipment that had a retail cash selling price of $1,250,000 and a useful life of five years with no residual value. The lessor paid $1,180,000 to acquire the equipment and used an implicit rate of 10% when calculating annual lease payments of $300,000 beginning January 1, at the beginning of the lease. What is the increase in the lessor's earnings during the first year as a result of the lease (ignore taxes)?
$70,000
$165,000
$125,000
$145,000

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