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6 minutes XYZ Lessor Company provided leased equipment at an annual payment of $117,883 (implicit rate is 5% ) on each January 1,8 years lease term and 8 year economic life (first payment received immediately.) The fair value of the equipment is $800,000 and the carrying value is $760,000. The Lessor's income statement for the first year of this lease will recognize the following (all amounts rounded to nearest dollar): Gross Profit $40,000; Interest Revenue $34,106. Gross Profit \$-0-; Interest Revenue $34,106. Gross Profit $40,000; Interest Revenue $0. Gross Profit $40,000; Interest Revenue $34,106, Depreciation Expense $100,000