Harter Company leased machinery to Stine Company on January 1, 2020. Equal annual payments under the lease are $75,000 and are due on January 1 of each year, starting on January 1, 2020. The implicit rate used by Harter is 9%. Assuming the present value of the minimum lease payments is $525,000, what amount of interest revenue would Harter record for the year ended December 31, 2020?

Hint: remember how the first payment is treated with regard to allocation between interest and liability reduction.

Group of answer choices

$33,750

$47,250

$40,500

$0