LeaseCo Industries leased equipment to UserCorp. On July 1, 2018. LeaseCo recorded the lease as a sales-type lease at $900,000, the present value of lease payments discounted at 10%. The lease called for ten annual lease payments of $150,000 due each July 1. The first payment was received on July 1, 2018. LeaseCo had manufactured the equipment at a cost of $680,000. What is the total increase in earnings (pretax) on LeaseCo's December 31, 2018, income statement?
Multiple Choice
$37,500
$157,500
$257,500
$265,000