On January 1, 20X3, Shuey Company Borrowed $1,000,000 at the Fixed

Multiple Choice

On January 1, 20X3, Shuey Company borrowed $1,000,000 at the fixed rate of 10% for 10 years with interest payable semi-annually. Shuey anticipates that interest rates will fall and has also arranged to receive a 10% rate of interest in exchange for the payment of variable rates based on LIBOR + 1.5%. LIBOR rates were as follows on the reset dates: How much interest expense is recognized for the six months ended December 31, 20X3?

A) $49,000
B) $50,000
C) $41,900
D) $48,500