On January $1,2021,$ Oriole Corporation signed a $5-$year noncancelable lease for equipment. The terms of the lease called for Oriole to make annual payments of $$203000$ at the beginning of each year for $5$ years beginning on January $1,2021$ with the title passing to Oriole at the end of this period. The equipment has an estimated useful life of $7$ years and no salvage value. Oriole uses the straightline method of depreciation for all of its fixed assets. Oriole accordingly accounts for this lease transaction as a finance lease. The lease payments were determined to have a present value of $$860663$ at an effective interest rate of $9\%.$

In $2021,$ Oriole should record interest expense of

$$59190.$

$$125540.$

$$77460.$

$$143810.$