1.On April 1, 2020, Summit County issued $10,000,000 in variable rate debt, with interest paid on March 31 of each year, the county's fiscal year-end. The variable rate is adjusted at the beginning of each year. The variable rate for fiscal 2021 was 2.9%. On the same date, the county entered a receive variable/pay fixed interest rate swap, where the county pays a 3.1% fixed rate to a counterparty. The swap qualifies for hedge accounting. At the end of fiscal 2021, the variable rate is reset to 3.2% and the swap has increased in value by $75,000. By the end of fiscal 2022, the variable rate is reset to 3.4%, and the swap has increased in value by $125,000.

Interest expense on the bonds for fiscal 2021, reported on the government-wide statement of activities, is

A. $235,000.

B. $215,000.

C. $290,000.

D. $310,000.

2.On April 1, 2020, Summit County issued $10,000,000 in variable rate debt, with interest paid on March 31 of each year, the county's fiscal year-end. The variable rate is adjusted at the beginning of each year. The variable rate for fiscal 2021 was 2.9%. On the same date, the county entered a receive variable/pay fixed interest rate swap, where the county pays a 3.1% fixed rate to a counterparty. The swap qualifies for hedge accounting. At the end of fiscal 2021, the variable rate is reset to 3.2% and the swap has increased in value by $75,000. By the end of fiscal 2022, the variable rate is reset to 3.4%, and the swap has increased in value by $125,000.

Interest expense on the bonds for fiscal 2022, reported on the government-wide statement of activities, is

A. $185,000.

B. $320,000.

C. $195,000.

D. $310,000.

3.On April 1, 2020, Summit County issued $10,000,000 in variable rate debt, with interest paid on March 31 of each year, the county's fiscal year-end. The variable rate is adjusted at the beginning of each year. The variable rate for fiscal 2021 was 2.9%. On the same date, the county entered a receive variable/pay fixed interest rate swap, where the county pays a 3.1% fixed rate to a counterparty. The swap qualifies for hedge accounting. At the end of fiscal 2021, the variable rate is reset to 3.2% and the swap has increased in value by $75,000. By the end of fiscal 2022, the variable rate is reset to 3.4%, and the swap has increased in value by $125,000.

At the beginning of fiscal 2022, the county decides the swap no longer qualifies for hedge accounting. The adjusting entry results in

A. a write-off of the derivatives investment, in the amount of $200,000.

B. a $200,000 loss, reported on the government-wide statement of activities.

C. an increase in deferred inflows of resources, in the amount of $200,000.

D. a $200,000 gain, reported on the government-wide statement of activities.