Question 8 options:

Q3: Interest Expense for second payment

Q2: Interest Expense for first payment

Q1: Cash Payment

1.	$200,000 X 7% X 6/12 = $7,000
2.	$250,206 X 5% X 6/12 = $6,255
3.	($250,206 - (7,000 - 6,255)) X 5% X 6/12 = $6,237
4.	$200,000 X 5% X 6/12 = $5,000
5.	$250,206 X 7% X 6/12 = $8,757
6.	($250,206 + (7,000 - 6,255)) X 7% X 6/12 = $8,774