What amount will perrys pretax earnings increase


On December 31, 2013, Perry Corporation leased equipment to Admiral Company for a five-year period. The annual lease payment, excluding executory costs is $47,000. 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, 2013. The normal cash price for this type of equipment is $165,000 while the cost to Perry was $136,000. For the year ended December 31, 2013, by what amount will Perry's pretax earnings increase from this lease?

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Accounting Basics: What amount will perrys pretax earnings increase
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