A Company Buys an Oil Rig for $2,000,000 on January

A company buys an oil rig for $2,000,000 on January 1, 2010.The life of the rig is 10 years and the expected cost to dismantle the rig at the end of 10 years is $400,000 (present value at 10% is $154,220) .10% is an appropriate interest rate for this company.What expense should be recorded for 2010 as a result of these events?

A) Depreciation expense of $240,000
B) Depreciation expense of $200,000 and interest expense of $15,422
C) Depreciation expense of $200,000 and interest expense of $40,000
D) Depreciation expense of $215,422 and interest expense of $15,422