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Question 27 (2.5 points) Saved Balla Inc. leased equipment to Gaga Company on May 1, 2021. At that time the collectibility of the lease payments was not probable. The lease expires on May 1, 2022. Gaga could have bought the equipment from Balla for $5,600,000 instead of leasing it. Balla's accounting records showed a book value for the equipment on May 1, 2021, of $4,900,000. Balla's depreciation on the equipment in 2021 was $630,000. During 2021, Gaga paid $1,260,000 in rentals to Balla for the 8-month period. Balla incurred maintenance and other related costs under the terms of the lease of $112.000 in 2021. After the lease with Gaga expires, Balla will lease the equipment to another company for two years. Ignoring income taxes, the amount of expense incurred by Gaga from this lease for the year ended December 31, 2021, should be $1,260,000. $1,148,000. $518,000. $630,000