The amount of interest revenue from the lease that king should report in its 2024 income statement is $3,400,000. The Option D is correct.
Interest revenue refers to the interest earned by the lessor (King) on the remaining lease receivable (initial lease receivable) after deducting the annual lease payment.
Interest Revenue = (Initial Lease Receivable - Annual Lease Payment) x Interest Rate
= ($40 million - $6 million) * 10%
= $34 million * 10%
= $3.4 million
Therefore, the interest revenue for the first year is $3.4 million.