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Amount of income report from lease transaction

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Slice Company manufactures equipment that they sell or lease. On December 31, 2002, Slice leased equipment to Hook Company for a five-year period after which the ownership of the leased asset will be transferred to Hook. The lease calls for equal annual payments of $50,000, due on December 31 of each year. The first payment was made on December 31, 2001. The normal sales price of the equipment is $220,000, and cost is $176,000. For the year ended December 31, 2002, what amount of income should Slice report from the lease transaction?

A. $10,000

B. $30,000

C. $44,000

D. $74,000

Reference no: EM13155282

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