At December 31, 2017, Moonlight Bay had a 10% installment note payable to Third Mercantile Bank with a balance of $610,000. The annual payment is $115,000, payable each June 30. On January 1, 2018, Moonlight Bay leased a building under a finance lease calling for four annual lease payments of $40,000 beginning January 1, 2018. Moonlight Bay’s incremental borrowing rate on the date of the lease was 9% and the lessor’s implicit rate, which was known by Moonlight Bay, was 8%.Calculate interest expense for the year ended December 31, 2018.