Answer:
$227,591.04
Explanation:
The computation of the interest expense is shown below;
The interest expense on the face value
= $2,750,000 × 10% × 6 months ÷ 12 months
= $137,500
And, the interest expense on the sale value
= $2,973,100 × 8% × 6 months ÷ 12 months
= $118,924
Now the closing balance would be
= $2,973,100 - $137,500 - $118,924
= $2,716,676
Now the interest on the same is
= $2,716,676 × 8% × 6 months ÷ 12 months
= $108,667.04
Now the interest expense is
= $108,667.04 + $118,924
= $227,591.04
