On January 1, 20X3, Shuey Company Borrowed $1,000,000 at a Variable

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

A) $51,500
B) $50,000
C) $51,000
D) $51,200