Whiterun Ltd owned a boat that has an economic useful life of 6 years as at 1 July 2020. On 1 July 2020 the company leased the boat to Riverwood Ltd for three years. Whiterun Ltd recognised this lease as a finance lease and recorded a lease receivable valued at $58 784. The annual lease payment is $20,000. Lease payments are to be made annually and in arrears. The interest rate implicit in the lease for Riverwood Ltd is 5%. What is the amount of Riverwood Ltd's first year's interest expense?

$2 939

$1 939

There has not been enough information provided to accurately determine this

$1 000