36) On January 2, 2025, Karr Company issued a 5-year, $6,000,000 note at LIBOR with interest paid annually. The variable rate is reset at the end of each year. The rate for the first year is 6.8%. Karr decides it prefers fixed- rate financing and wants to lock in a rate of 7%. As a result, Karr enters into an interest rate swap to pay 7% fixed and receive LIBOR based on $6 million. The variable rate is reset to 7.4% on January 2, 2026. What net interest expense will be reported for this note and the related swap transactions on Karr's 2026 income statement? 36) A) $444,000 B) $408,000 C) $420,000 D) $404,000