On January 1, 2018, Billy purchased a customized asset for $280,000 (fair value on purchase date) and leased it to Steven for 6 years.

Other info:

Billy Year end Dec. 31

Lease term = 6 years

The payments are due annually, and first payment on purchase date (January 1, 2018)

Economic life = 8 years

Billys rate =8%

Billys rate not including initial direct cost = 6%

Steven has the option to buy the asset for $12,000 at the end of the lease term, residual value=$35,000, Billy is required Steven to guarantee 75% of the residual value.

Billy pays $4,000 in commissions to arrange lease

Q: If Billy is a Financial Institution, how much FINANCE INCOME is recorded at end of 2018?