On January 1, 2018, Carla Vista Corporation signed a 5-year noncancelable lease for equipment. The terms of the lease called for Carla Vista to make annual payments of $207000 at the beginning of each year for 5 years beginning on January 1, 2018 with the title passing to Carla Vista at the end of this period. The equipment has an estimated useful life of 7 years and no salvage value. Carla Vista uses the straight-line method of depreciation for all of its fixed assets. Carla Vista accordingly accounts for this lease transaction as a capital lease. The minimum lease payments were determined to have a present value of $849206 at an effective interest rate of 11%. In 2018, Carla Vista should record interest expense of