On January 2, 2015, Hernandez, Inc. signed a ten-year non cancelable lease for a heavy duty drill press. The lease stipulated annual payments of $200,000 starting at the beginning of the first year, with title passing to Hernandez at the expiration of the lease. Hernandez treated this transaction as a capital lease. The drill press has an estimated useful life of 15 years, with no salvage value. Hernandez uses straight-line depreciation for all of its plant assets. Aggregate lease payments were determined to have a present value of $1,200,000, based on implicit interest of 10%. In its 2015 income statement, what amount of interest expense should Hernandez report from this lease transaction?

*answer is $100,000 I just don't know how to get it :)*