Question $22$

$1pts$

ABC Company leased a machine from XYZ Ltd$.$ on July $1,2019.$ Annual lease payments of $$120,000$ are due at inception and every year thereafter, on July $1.$ The present value of the lease payments on July $1,2019,$ at an implicit interest rate of $5\%,$ was $$1,059,000.$ How much interest expense will ABC record on December $31,2019,$ when the market interest rate was $4\%?$ NOTE: ABC's year end is December $31.$

$$37,560$

$$23,475$

$$42,360$

$$26,475$