On August 1, 2016, Harriet's paid-off the $75,000 note payable that was outstanding at the beginning of the period. The note had an 8% interest rate, had been issued on August 1, 2015, and required semiannual interest payments on Jan 31, 2016 and July 31, 2016.

The three solution journal entries are:

Note Payable $75,000

Cash $75,000

Interest Payable $2,500

Interest Expense $ 500

Cash $3,000

Interest Expense $3,000

Cash $3,000

Can someone please walk me through these journal entries and explain how why we have an interest expense of $500 in there?