Question 15 Conn Company purchased a new machine for $480,000 on January 1, Year 1, and leased it to East the same day. The machine has an estimated 12-year life and will be depreciated $40,000 per year. The lease is for a 3-year period expiring January 1, Year 4, at an annual rental of $85,000. What is Conn's Year 1 operating profit on this leased asset? $55,000 $85,000 $40,000 $45,000