On January 2, 2008, Lafayette Machine Shops, Inc. signed a 10-year noncancelable lease for a heavy-duty drill press, stipulating annual payments of \($15,000\) starting at the end of the first year, with title passing to Lafayette at the expiration of the lease. Lafayette treated this transaction as a capital lease. The drill press has an estimated useful life of 15 years with no salvage value. Lafayette uses straight-line depreciation for all of its fixed assets. Aggregate lease payments were determined to have a present value of \($92,170\) based on an implicit interest rate of 10%.
Required:
What amount should Lafayette record for interest expense and depreciation expense for 2008?