Exhibit 20-1 On January 1, 2016, Pearson Company Signed a Lease Agreement

Multiple Choice

Exhibit 20-1
On January 1, 2016, Pearson Company signed a lease agreement requiring six annual payments of $60,000,
beginning December 31, 2016. Pearson's incremental borrowing rate was 9% and the lessor's implicit rate, known by
Pearson, was 10%. The present value factors of an ordinary annuity of $1 for six periods for interest rates of 9%
and 10% are 4.48592 and 4.35526, respectively.
-Refer to Exhibit 20-1. What would be the interest expense for 2016 round answers to the nearest dollar) ?

A) $21,003
B) $22,746
C) $24,224
D) $26,132