Expanding Corporation financed a $500,000 expansion by mortgaging their head office building for seven years. They negotiated a rate of 5% per annum. They will make equal annual payments at the end of the year.

Note: if needed, complete the amortization table for the mortgage using the effective interest method

How much is the interest expense in Year 3?

$13,072

$24,954

None of the other alternatives are correct

$19,181

$9,960