On January 1, 2021, Cullumber Corporation signed a 5-year noncancelable lease for equipment. The terms of the lease called for Cullumber to make annual payments of $201000 at the beginning of each year for 5 years beginning on January 1, 2021 with the title passing to Cullumber at the end of this period. The equipment has an estimated useful life of 7 years and no salvage value. Cullumber uses the straight-line method of depreciation for all of its fixed assets. Cullumber accordingly accounts for this lease transaction as a finance lease. The lease payments were determined to have a present value of $824592 at an effective interest rate of 11%. In 2021, Cullumber should record interest expense of $110295. $90705. $132405. $68595.