Parmentier Co. leased vehicles from Collier Chevrolet on July 1, 2021, in a "finance lease". The present value of the lease payments discounted at 8% was $61,600. Ten annual lease payments of $8,500 are due each year beginning July 1, 2021. Collier had purchased the vehicles recently for $53,500, and its retail fair value was $61,600. The total decrease in earnings (pretax) in Parmentier's December 31, 2021, income statement would be (ignore taxes):

Multiple Choice

$6,376.

$5,204.

$4,928.

$3,296.