On January 1, 2025, Sunland Corporation signed a ten-year noncancelable lease for certain machinery. The terms of the lease called for Sunland to make annual payments of $165015 at the end of each year for ten years with the title passing to Sunland at the end of this period. The machinery has an estimated useful life of 15 years and no salvage value. Sunland uses the straight-line method of depreciation for all of its fixed assets. Sunland accordingly accounted for this lease transaction as a finance lease. The lease payments were determined to have a present value of $1059010 at an effective interest rate of 9%. With respect to this lease, Sunland should record for 2025

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interest expense of $70601 and amortization expense of $59600.

lease expense of $165015.

interest expense of $95311 and amortization expense of $70601.

interest expense of $77311 and amortization expense of $70601.