[The Following Information Applies to the Questions Displayed Below

Multiple Choice

[The following information applies to the questions displayed below.]

On January 1, Year 1, The Palms borrowed $200,000 to purchase a warehouse by agreeing to a 8%, 5-year note with the bank. Payments of $50,091.29 are due at the end of each year. The first payment will be made on December 31, Year 1.


-What is the interest expense for Year 1 and Year 2,respectively? (Round your final answers to the nearest dollar. )

A) $3,200 and $14,000
B) $16,000 and $16,350
C) $16,000 and $13,273
D) $20,625 and $16,000