Parlor Company manufactures equipment that they sell or lease. On December 31 . 2014, 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 . 2014 . The normal sales price of the equipment
is $320,000, and cost is $276,000 . For the year ended December 31 . 2014, what amount of income should Parlor report from the lease transaction?
a. $10,000
b. $30,000
c. $44,000
d. $74,000
C
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