1. Jan. 2, 2025: Issued 5-year, $1,000,000 bonds at par value.

2. Dec. 31, 2025: Payment of interest on the bonds.

3. Dec. 31, 2025: Settlement payment on the interest rate swap.

4. Dec. 31, 2025: Provide any journal entry needed to record change in fair value of the debt obligation.

5. Dec. 31, 2025: Provide any journal entry needed to record change in fair value of the interest rate swap.

On January 2, 2025, Hill Corp. issued 5-year, $1,000,000 bonds at par. Interest is payable annually on December 31 at a stated fixed rate of 5.0% To mitigate interest rate risk, Hill Corp. entered into a 5-year interest rate swap with a swap bank on January 2, 2025. Terms of the contract were as follows: - Hill Corp. agreed to pay a variable rate of interest to the swap bank. - In return, Hill Corp. will receive fixed rate interest from the swap bank. Interest rates during 2025 were the following: As a result of the decrease in the market interest rate during 2025 , both the debt obligation and swap contract increased during 2025. Specifically, as of December 31, 2025, the bond liability and interest rate swap had a fair value of $1,028,903 and $28,903, respectively. Required: 1. Prepare the appropriate journal entry or entries for each transaction. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 2. Indicate any amounts that Hill Corp. would report in its December 31, 2025 balance sheet and income statement related to the interest rate swap. Prepare the appropriate journal entry or entries for each transaction. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Indicate any amounts that Hill Corp. would report in its December 31, the interest rate swap