On January 1, 2018, Company X is holding $10,000,000, 5% fixed-rate debt which matures in 4...
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On January 1, 2018, Company X is holding $10,000,000, 5% fixed-rate debt which matures in 4 years. To hedge this debt, Company X enters into a 4-year interest rate swap to receive 5% and pay LIBOR on a notional of $10,000,000. Settlement and rate reset is each December 31. The following information is available: DATE LIBOR FMV of Swap Jan. 1, 2018 5% Dec. 31, 2018 4.7% $81,450 Dec. 31, 2019 5.8% ($147,300) In an orderly manner, prepare the appropriate entries for the interest payment, swap settlement (if applicable) and necessary adjustments for 2018 and 2019. HTML On January 1, 2018, Company X is holding $10,000,000, 5% fixed-rate debt which matures in 4 years. To hedge this debt, Company X enters into a 4-year interest rate swap to receive 5% and pay LIBOR on a notional of $10,000,000. Settlement and rate reset is each December 31. The following information is available: DATE LIBOR FMV of Swap Jan. 1, 2018 5% Dec. 31, 2018 4.7% $81,450 Dec. 31, 2019 5.8% ($147,300) In an orderly manner, prepare the appropriate entries for the interest payment, swap settlement (if applicable) and necessary adjustments for 2018 and 2019. HTML
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Related Book For
Intermediate Accounting
ISBN: 978-0078025839
9th edition
Authors: J. David Spiceland, James Sepe , Mark Nelson , Wayne Thomas
Posted Date:
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