Karla Salons leased equipment from Smith Co. on July 1, 2021, in a finance lease. The present value of the lease payments discounted at 11% was $78,400. Ten annual lease payments of $12,000 are due each year beginning July 1, 2021. Smith Co. had constructed the equipment recently for $70,000, and its retail fair value was $78,400. The total decrease in earnings (pretax) in Karla's December 31, 2021, income statement would be (ignore taxes): Multiple Choice O $8,348 $7,572. O $8,624. $4,428 On January 1, 2021, Green Co. recorded a right-of-use asset of $206,140 in an operating lease. The lease calls for ten annual payments of $30,500 at the beginning of each year. The interest rate charged by the lessor was 10%. The balance in the right-of-use asset at December 31, 2021, will be: Multiple Choice $206,140. $193,204. O $185,526. $175,640