On January 2, 2018, Tylor Company issued a 4-year, $650,000 note at 6% fixed interest, interest payable semiannually. Tylor now wants to change the note to a variable rate note. As a result, on January 2, 2018, Tylor Company enters into an interest rate swap where it agrees to receive 6% fixed and pay LIBOR of 5.5% for the first 6 months on $650,000. At each 6-month period, the variable interest rate will be reset. The variable rate is reset to 6.5% on June 30, 2018.
Compute the net interest expense to be reported for this note and related swap transaction as of June 30, 2018.
Net interest expense$
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Compute the net interest expense to be reported for this note and related swap transaction as of December 31, 2018.
Net interest expense