Alden Trucking Company is replacing part of its fleet of trucks by purchasing them under a note agreement with Kenworthy on January 1, 2016. Alden financed $37,908,000, and the note agreement will require $10 million in annual payments starting on December 31, 2016 and continuing for a total of four more years (final payment December 31, 2020). Kenworthy will charge Alden Trucking Company the market interest rate of 10% compounded annually. Upon the first payment of the note on December 31, 2016, the amount of interest expense to be recorded is:
A)$1,000,000.
B)$2,790,800.
C)$3790, 800.
D)$4,000,000.

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The Answer of Alden Trucking Company is replacing part of its fleet of trucks by purchasing them under a note agreement with Kenworthy on January 1, 2016. Alden financed $37,908,000, and the note agreement will require $10 million in annual payments starting on December 31, 2016 and continuing for a total of four more years (final payment December 31, 2020). Kenworthy will charge Alden Trucking Company the market interest rate of 10% compounded annually. Upon the first payment of the note on December 31, 2016, the amount of interest expense to be recorded is:
A)$1,000,000.
B)$2,790,800.
C)$3790, 800.
D)$4,000,000.

Alden Trucking Company Is Replacing Part of Its Fleet of Trucks