On July 1, Alton Co. issued an $89,800, 7%, 120-day note payable to Seller Co. Assume that the fiscal year of Alton Co. ends July 31. Using a 360-day year in your calculations, what is the amount of interest expense recognized by Alton in the current fiscal year? When required, round your answer to the nearest dollar.

Select the correct answer.

$1,572

$1,048

$6,286

$524