Refer to the following lease amortization schedule. The five payments are made annually starting with the beginning
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Refer to the following lease amortization schedule. The five payments are made annually starting with the beginning of the lease. A $2,200 purchase option is reasonably certain to be exercised at the end of the five-year lease. The asset has an expected economic life of eight years.
Lease Payment | Cash Payment | Effective Interest | Decrease in Balance | Outstanding Balance | ||||||
31,560 | ||||||||||
1 | 6,700 | ?? | ?? | 24,860 | ||||||
2 | 6,700 | 1,492 | 5,208 | 19,652 | ||||||
3 | 6,700 | 1,179 | 5,521 | 14,131 | ||||||
4 | 6,700 | 848 | 5,852 | 8,279 | ||||||
5 | 6,700 | ?? | ?? | ?? | ||||||
6 | 2,200 | 125 | 2,075 | 0 | ||||||
What would be the amount of interest expense recorded with payment 5? (Round your answer to the nearest whole dollar amount.)
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