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Claire Company leased equipment on July 1. The lease was recorded as a finance lease. The present value of the lease payments discounted at 10%

Claire Company leased equipment on July 1. The lease was recorded as a finance lease. The present value of the lease payments discounted at 10% was $10,125,000. Ten annual lease payments of $1.5 million are due each July 1 beginning at inception of the lease. What amount of interest expense should Claire Company report in its December 31 income statement? A. $1,012,500. B. $862,500. C. $506,250. D. $431,250

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