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What is the net interest receipt that gates will make

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Problem 1: Gates Company issued a 4-year, $800,000 note at 6% fixed interest, interest payable every six months on January 2, 2020. Gates wants to change the note to a variable rate note. As a result, on the same date, Gates signed a contract with Burke Derivative Emporium for an interest rate swap where Gates agrees to receive 6% fixed and pay LIBOR of 5.6% for the first 6 months on $800,000. At each 6-month period, the variable interest rate will be reset. The variable rate is reset to 6.6% on June 30, 2020. What is the net interest payment or receipt that Gates will make (receive) on June 30, 2020?

Reference no: EM132838651

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