Claude leased a facility from ML partnership in January 1, 2018. Terms of the lease were as follows: Annual rental Annual real property tax assumed and paid by Claude 50,000 Security deposit 300,000...

Extracted text: Claude leased a facility from ML partnership in January 1, 2018. Terms of the lease were as follows: Annual rental Annual real property tax assumed and paid by Claude 50,000 Security deposit 300,000 200,000| Lease term 12 years On January 1, 2018, Claude paid the annual rental for 2018 and 2019 including the security deposit (non-refundable). In addition to annual rental and real property taxes, part of the lease was for Claude to improve the facility. The improvement was completed on January 1, 2020. Details of the improvements were as follows: Cost of leasehold improvement - 6,000,000 Estimated useful life of improvement - 15 years Determine the income to be reported by ML partnership in 2018 and 2019, respectively. 600,000; 50,000 650,000; 0 850,000; 50,000 350,000; 350,000