1. Metric Company, a dealer in machinery and equipment, leased equipment to Hands, Inc., on July 1, 2021. The lease is appropriately accounted for as a sales-type lease by Metric and as a finance lease by Hands. The lease is for a 10-year period (the useful life of the asset) expiring June 30, 2031. The first of 10 equal annual payments of $828,000 was made on July 1, 2021. Metric had purchased the equipment for $5,250,000 on January 1, 2021, and established a list selling price of $7,200,000 on the equipment. Assume that the present value at July 1, 2021, of the rent payments over the lease term discounted at 8% (the appropriate interest rate) was $6,000,000.

   Assuming that Hands, Inc. uses straight-line depreciation, what is the amount of depreciation and interest expense that Sands should record for the year ended December 31, 2021?

   	a.	$3,600,000 and $206,880
   	b.	$3,600,000 and $160,000
   	c.	$300,000 and $240,000
   	d.	$300,000 and $206,880