QUESTION 14 On January 1, 2021, Pine Corporation signed a five-year noncancelable lease for equipment. The terms of the lease called for Pine to make annual payments of $800,000 at the beginning of each year for five years beginning on January 1, 2021 with the title passing to Pine at the end of this period. The equipment has an estimated useful life of 7 years and no salvage value. Pine uses the straight- line method of depreciation for all of its fixed assets. Pine accordingly accounts for this lease transaction as a finance lease. The lease payments were determined to have a present value of $3,335,888 at an effective interest rate of 10%. In 2021, Pine should record interest expense of: 333,589 253,589 466,411 546,411 QUESTION 15 Triscuit Company is leasing a machine to Electric Company. The machine has a cost of $500,000 and a fair value of $750,000. The lease is for 6 years and the machine is estimated to have an unguaranteed residual value of $75,000. The lessor's interest rate implicit in the lease is 10%. There are six payments made at the beginning of each year. The annual lease payments would be for what amount? (Use a present value table to solve this.) $156,550 $140,895 $147,714 $125,000