Current Attempt in Progress

On January $2,2025,$ Marin Company issues a $5-$year, $$7,200,000$ note at LIBOR, with interest paid annually. The variable rate is reset

at the end of each year. The LIBOR rate for the first year is $5\mathrm{.}80\%.$

Marin Company decides it prefers fixed$-$rate financing and wants to lock in a rate of $6\%.$ As a result, Marin enters into an interest rate

swap to pay $6\%$ fixed and receive LIBOR based on $$7\mathrm{.}2$ million. The variable rate is reset to $6\mathrm{.}70\%$ on January $2,2026.$

$($a$)$ Compute the net interest expense to be reported for this note and related swap transactions as of December $31,2025.$

Net interest expense December $31,2025,$$

$($b$)$ Compute the net interest expense to be reported for this note and related swap transactions as of December $31,2026.$

Net interest expense December $31,2026$