On January $2,2025,$ Cullumber Company issues a $5-$year, $$8,000,000$ note at LIBOR, with interest paid annually. The variable rate is reset at the end of each year. The LIBOR rate for the first year is $5\mathrm{.}80\%.$ Cullumber Company decides it prefers fixed$-$rate financing and wants to lock in a rate of $6\%.$ As a result, Cullumber enters into an interest rate swap to pay $6\%$ fixed and receive LIBOR based on $$8\mathrm{.}0$ 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 $31,2026$ On January $2,2025,$ Cullumber Company issues a $5-$year, $$8,000,000$ 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 $5\mathrm{.}80\%.$

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

interest rate swap to pay $6\%$ fixed and receive LIBOR based on $$8\mathrm{.}0$ 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,$$$|$