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YOUR Company leases a machine from MY Company on July 1 , 2 0 x 1 . Lease payments of $ 1 4 , 8

YOUR Company leases a machine from MY Company on July 1,20x1. Lease payments of $14,806 are due each July 1, beginning July 1,20x1. The lease qualifies as a finance lease for YOUR Company and a sales-type lease for MY Company. The incremental borrowing rate for YOUR Company is 10%. The lessor's implicit rate is 8%. The carrying value on the books of MY Company is $70,000.The lease term is 8 years. The useful life of the machine is 10 years. The fair value of the machine at the inception of the lease is $100,000. The expected residual value at the end of 8 years is $15,000 and at the end of 10 years is $6,000. The lessee guarantees $9,000 of the salvage value.YOUR Company capitalized the lease at that value, $91,892.How much interest expense will YOUR company report for 20x1?

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