The correct answer of this question is $6420.95.
Given here, the market rate is 10% and the time is semiannual period (1/2 year)
Now we calculate, Amount of interest expense by the formula,
Amount of interest expense = Principal × Rate × Time
= 124979 × 10% × ½
= 6248.95 $
So, the amount of interest expense for the first semiannual interest period is 6248.95$.
Interest expense made by a business on any bonds, loans, convertible debt, and lines of credit are included in interest expenditure, which is a term used to describe the cost of borrowing money.
Margin interest, which is charged in taxable brokerage accounts when borrowed money is used to buy investments, is also included in interest expense. A company’s interest expense is included on its income statement and represents the interest accrued, but not necessarily paid, over a specific period of time.
To learn more about Interest expense, refer this link.
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