Current Attempt in Progress

On January $1,2023,$ Sandhill Ltd$.$ signs an $8-$year non$-$cancellable lease agreement to lease a storage building from Hyde Inc. Hyde is in the business of leasing$/$selling property. Collectibility of the lease payments is reasonably assured and no additional costs are to be incurred by the lessor $($other than executory costs$).$ Both the lessor and the lessee are private corporations adhering to ASPE. The following information is available regarding this lease agreement:

The agreement requires equal payments at the end of each year.

At January $1,2023,$ the fair value of the building is $$1354000$ and Hyde's book value is $$1137000.$

The building has an estimated economic life of $8$ years, with no residual value. Sandhill uses straight$-$line depreciation for all its depreciable assets.

At the termination of the lease, title to the building will transfer to the lessee.

Sandhill's incremental borrowing rate is $10\%.$ Hyde Inc. set the annual rental to ensure a $9\%$ rate of return. The lessor's implicit rate is known to Sandhill.

The yearly lease payment includes $$4800$ executory costs related to taxes on the property.

Rounded to the nearest dollar, how much depreciation expense would Sandhill record on this asset for calendar $2023?$

$$169250$

$$115200$

$$142125$

$$0$