Barton Industries leased exercise equipment to Witherspoon Gyms on July 1, 2013. Grant recorded the lease receivable at $810,000, the present value of lease payments discounted at 10% and fair value of the equipment. The lease called for ten annual lease payments of $120,000 due at the beginning of each year. The first payment was received on July 1, 2013. Barton had manufactured the equipment at a cost of $750,000. The total increase in earnings (pretax) on Barton's December 31, 2013, income statement would be:
A) $81,000.
B) $94,500.
C) $100,500.
D) $120,000.
