Oriole, Inc. leased equipment from Tower Company under a $4-$year lease requiring equal annual payments of $$254152,$ with the first

payment due at lease inception. The lease does not transfer ownership, nor is there a bargain purchase option. The equipment has a $4-$

year useful life and no salvage value. Oriole, Inc.$\text{'}$s incremental borrowing rate is $11\%$ and the rate implicit in the lease $($which is known

by Oriole, Inc.$)$ is $9\%.$ Assuming that this lease is properly classified as a finance lease, what is the amount of interest expense recorded

by Oriole, Inc. in the first year of the asset's life?

$$57900$

$$0$

$$74104$

$$27957$Oriole, Inc. leased equipment from Tower Company under a $4-$year lease requiring equal annual payments of $$254152,$ with the first payment due at lease inception. The lease does not transfer ownership, nor is there a bargain purchase option. The equipment has a $4-$year useful life and no salvage value. Oriole, Inc.$\text{'}$s incremental borrowing rate is $11\%$ and the rate implicit in the lease $($which is known by Oriole, Inc.$)$ is $9\%.$ Assuming that this lease is properly classified as a finance lease, what is the amount of interest expense recorded by Oriole, Inc. in the first year of the asset's life?

PV Annuity.

Due

PV Ordinary.

Annuitv

$3\mathrm{.}53129$

$3\mathrm{.}23972$

$9\%,4$ periods

$11\%,4$ periods

$344371$

$3\mathrm{.}10245$

$0$ $$57900$

g$0$

$$74104$

$+27957$

Oriole, Inc. leased equipment from Tower Company under a $4-$year lease requiring equal annual payments of $$254152,$ with the first payment due at lease inception. The lease does not transfer ownership, nor is there a bargain purchase option. The equipment has a $4-$year useful life and no salvage value. Oriole, Inc.$\text{'}$s incremental borrowing rate is $11\%$ and the rate implicit in the lease $($which is known by Oriole, Inc.$)$ is $9\%.$ Assuming that this lease is properly classified as a finance lease, what is the amount of interest expense recorded by Oriole, Inc. in the first year of the asset's life?

PV AnnuitY.

Due

PV Ordinary.

Annuity.

$9\%,4$ periods

$3\mathrm{.}53129$

$3\mathrm{.}23972$

$11\%,4$ periods

$3\mathrm{.}44371$

$3\mathrm{.}10245$

$0$ $$57900$

O $$0$

O $$74104$

O $$27957$