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Question - On January 1, 2020. TALA Company leases a property from ALAT Company with the following terms:
Annual rent (payable every year end) 220,000
Lease term 5 years
Purchase option 30,000
Implicit interest rate 12%
Useful life of the property 8 years
On January 1, 2022, it was ascertained that TALA Company will no longer exercise the purchase option and the annual rent will be increased by 5% starting January 1, 2022. How much is the interest expense on December 31, 2024?
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