Straight Industries purchased a large piece of equipment from Curvy Company on January 1, 2019. Straight Industries signed a note, agreeing to pay Curvy Company $300,000 for the equipment on December 31, 2021. The market rate of interest for similar notes was 9%. The present value of $300,000 discounted at 9% for five years was $194,979. On January 1, 2019, Straight Industries recorded the purchase with a debit to equipment for $194,979 and a credit to notes payable for $194,979. How much is the 2020 interest expense, assuming that the December 31, 2019 adjusting entry was made?

• $24,693.

• $22,493.

• $19,127.

• $27,000.