Answer:
$256,196,490
Explanation:
The computation of the interest expense recognized in 2021 income statement is shown below:
For cash interest for 3 months, it would be
= $300,000,000 × 4% × 3 months ÷ 12 months
= $3,000,000
For 3 months, it would be
= $255,369,000 × 6% × 3 months ÷ 12 months
= $3,830,490
The change in carrying value is
= $3,830,490 - $3,000,000
= $830,490
So, the interest expense is
= $255,369,000 + $830,490
= $256,196,490
The 3 months is calculated from October 1 to December 31
