On January 1,2021 , Sheridan Corporation signed a 5-year noncancelable lease for equipment. The terms of the lease called for Sheridan to make annual payments of $193000 at the beginning of each year for 5 years beginning on January 1, 2021 with the title passing to Sheridan at the end of this period. The equipment has an estimated useful life of 7 years and no salvage value. Sheridan uses the straight-line method of depreciation for all of its fixed assets. Sheridan accordingly accounts for this lease transaction as a finance lease. The lease payments were determined to have a present value of $818266 at an effective interest rate of 9%. In 2021, Sheridan should record interest expense of $56274. $73644. $136726