Simba Inc. leased equipment from Lion Leasing Co. on July 1, 2021, in a sales-type lease. The present value of the lease payments discounted at 8% was $90,000. Nine annual lease payments of $14,000 are due each July 1, beginning July 1, 2021. The total decrease in earnings (pretax) on Simba's Dec. 31, 2021 income statement would be:

Group of answer choices

$8,040

$7,180

None of the options listed.

$7,400

$8,900