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The following information relates to Wilson, Inc.'s equipment lease with an inception date of January...

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Accounting

The following information relates to Wilson, Inc.'s equipment lease with an inception date of January 1:
Fair value of equipment at lease inception, $91,200
Lease term, 4 years
Economic life of property, 5 years
Implicit interest rate, 6%
Annual lease payment due on December 31,$25,600
Present value of the lease payments, $88,707
The equipment reverts back to the lessor at the end of the lease term.
How much is interest expense on the lease for the first year?
Select one:
a. $2,736
b. $5,472
c. $5,322
d. $1,331
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