Karla Salons leased equipment from Smith Co. on July 1, 2021, in a finance lease. The present value of the lease payments discounted at 6% was $81,900. Ten annual lease payments of $10,500 are due each year beginning July 1, 2021. Smith Co. had constructed the equipment recently for $71,500, and its retail fair value was $81,900. The total decrease in earnings (pretax) in Karla's December 31, 2021, income statement would be (ignore taxes):

A) $8,358

B) $6,237

C) $4,914

D) $4,263