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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Please help me.
Thankyou.

Transcribed Image Text:On January 1, 2025, Oriole Inc. issued a 10-year, $440,000 note at 7% fixed interest, interest payable semiannually. Oriole preferred a
variable-rate note, but its lender offered only fixed-rate loans. As a result, Oriole entered into an interest rate swap on the same day
where it agrees to receive 7% fixed and pay LIBOR of 4.8% for the first 6 months on $440,000. At each 6-month period, the variable
rate will be reset. The variable rate is reset to 5.4% on June 30, 2025.
(a) Compute the net interest expense to be reported for this note and related swap transaction as of June 30, 2025.
Net interest expense June 30, 2025 $
(b) Compute the net interest expense to be reported for this note and related swap transaction as of December 31, 2025.
Net interest expense December 31, 2025 $
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