On January 1, 2025, Blossom Corporation signed a five-year noncancelable lease for equipment. The terms of the lease called for Blossom to make annual payments of $230000 at the beginning of each year for five years with title the passing to Blossom at the end of this period. The equipment has an estimated useful life of 7 years and no salvage value. Blossom uses the straight-line method of depreciation for all of its fixed assets. Blossom accordingly accounts for this lease transaction as a finance lease. The lease payments were determined to have a present value of $943563 at an effective interest rate of 11%.

Concerning this lease, for 2026 Blossom should record

O interest expense of $87126.

O interest expense of $103792.

O interest expense of $78492.

O interest expense of $61826.