On January 2, 2020, White sells a used equipment having a carrying amount on its books of $500,000 to

Black for $580,000. White immediately leases the equipment back form Black. It is assumed that the

transaction meets the criteria for sale-lease back. The term of the lease is eight years, equal rental

payments ia $88,955 at the beginning of each year, beginning January 2, 2020. The equipment reverts to

Black at the termination of the lease. The equipment has a fair value of $580,000 on January 2, 2020, and

an estimated remaining economic life of 10 years. The residual value (unguaranteed) at the end of the

lease is $20,000. The annual payments assure Black an 7% percent return (which is the same as White's

incremental borrowing rate). The present value of an annuity due of for 8 years at 7% is 6.38929. The

present value of 1 for 8 years at 7% is 0.58201. White and Black use straight-line depreciation method.

What is the amount recorded by White for gain on sale of equipment Right-of-Use Asset at the inception of lease on January 2, 2020?

O a. $60,000.

b. $0.

O c. $80,000.

OneDrive

O d. $68,360.