Exercise 21-14

On February 20, 2017, a machine for $1, 620,000 for the purpose of leasing it. The machine is expected to have a 10-year life, no residual value, and will be depreciated on the straight-line basis. The machine was leased to Headland Company on March 1, 2017, for a 4-year period at a monthly rental of $19, 200. There is no provision for February 2017. (a) What expense should Headland Company record as a result of the facts above for the year ended December 31, 2017? Rent Expense $ (b) What income or loss before income taxes should Marin record as a result of the facts above for the year ended December 31, 2017? Income from lease before taxes $