Midi Corporation borrows $54,200 from its bank on August 31st of Year 1 to purchase a new machine. The loan is a five year term at 6% and Midi makes semi-annual payments of $6,252 covering interest and principal. Midis year end is December 31 and payment dates are February 28th and August 31st. The loan is secured by other investments held by Midi.

Required 1: What is the amount of interest expense recognized in the books as of December 31st of year 1? $

Required 2: What is the amount of interest payable recognized in the books as of December 31st of year 1? $

Required 3: What is the amount of loan payable cancelled on February 28th of Year 2? $