Western Company leased equipment from Sunshine Industries. The lease agreement qualifies as a finance lease and requires annual lease payments of $120,000 over a five-year lease term (also the assets useful life), with the first payment at January 1, 2018, the beginning of the lease. The interest rate is 9%. The asset being leased cost Sunshine $500,000 to produce. The total increase in earnings (pretax) on Sunshines December 31, 2018, income statement would be:

a. $0 b. $35,534 c. $43,755 d. $51,375