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Allan Company leased equipment to Harlan Company on May 1, 2016. The lease expires on May 1, 2017. During 2016, Harlan paid $1,080,000 in rentals
Allan Company leased equipment to Harlan Company on May 1, 2016. The lease expires on May 1, 2017. During 2016, Harlan paid $1,080,000 in rentals to Allan for the 8-month period. Allan incurred maintenance and other related costs under the terms of the lease of $96,000 in 2016 as well as $540,000 in depreciation. Ignoring income taxes, the amount of expense incurred by Harlan from this lease for the year ended December 31, 2016, should be
A :
$984,000.
B :
$540,000.
C :
$1,080,000.
D :
$1,176,000.
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