On January $2,2023,$ Sandhill Corp. issued a $$98,000,$ four$-$year note at prime plus $1\%$ variable interest, with interest payable semiannually. On the same date, Sandhill entered into an interest rate swap where it agreed to pay $6\%$ fixed and receive prime plus $1\%$ for the first six months on $$98,000.$ At each six$-$month period, the variable rate will be reset. The prime interest rate is $5\mathrm{.}7\%$ on January $2,2023,$ and is reset to $6\mathrm{.}7\%$ on June $30,2023.$ On December $31,2023,$ the fair value of the swap has increased by $$25,000.$ Sandhill follows ASPE and uses hedge accounting. Assume that the swap qualifies for hedge accounting under ASPE.$\backslash$

$($b$)\backslash$

Calculate the net interest expense to be reported for this note and the related swap transaction as at June $30$ and December $31,$