Problem
King Cones leased ice cream-making equipment from Liang Leasing. Liang earns interest under such arrangements at a 6% annual rate. The lease term is eight months with monthly payments of $10,000 at the end of each month. Liang purchased the equipment having an estimated useful life of four years at a cost of $300,000. Both the lessee and the lessor elected the short-term lease option. Amortization is recorded at the end of each month on a straight-line basis. Liang depreciates assets monthly on a straight-line basis. What is the effect of the lease on King Cones' earnings during the eight-month term, ignoring taxes?
In the situation described in BE 15'30, what is the effect of the lease on Liang Leasing's earnings during the eight-month term, ignoring taxes?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.