On January 1 of Year1, Company purchased a machine with a $6,000 loan. The loan required 5 equal payments on December 31 of each year. The annual interest rate was 6% . The annual payment (of interest and principle) was $1,425. In Year2, how much interest expense will Company report for this loan? Note, this is the SECOND year of the loan.

Choose the answer closest to your calculation. (You don't need the tables for this one). a. $360 b. $338 c. $225 d. $296 e. $1,425