2 20 points eBook On January 1, 2021, S&S Corporation invested in LLB Industries' negotiable two-year, 12% notes, with interest receivable quarterly. The company classified the investment as available-for-sale. S&S entered into a two-year interest rate swap agreement on January 1, 2021, and designated the swap as a fair value hedge. Its intent was to hedge the risk that general interest rates will decline, causing the fair value of its investment to increase. The agreement called for the company to make payment based on a 12% fixed interest rate on a notional amount of $250,000 and to receive interest based on a floating interest rate. The contract called for cash settlement of the net interest amount quarterly. Floating (LIBOR) settlement rates were 12% at January 1, 10% at March 31, and 8% June 30, 2021. The fair values of the swap are quotes obtained from a derivatives dealer. Those quotes and the fair values of the investment in notes are as follows: Fair value of interest rate swap Print Fair value of the investment in notes $250,000 January 1 March 31 0 $ 6,972 $256,972 June 30 $ 12,394 $262,394 References Required: 1. Calculate the net cash settlement at March 31 and June 30, 2021. 2. Prepare the journal entries through June 30, 2021, to record the investment in notes, interest, and necessary adjustments for changes in fair value. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entries through June 30, 2021, to record the investment in notes, interest, and necessary adjustments for changes in fair value. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet No 1 Date January 01 General Journal Investment in notes Cash 2 March 31 Cash Interest revenue < Required 1 Required 2 > Debit Credit 250,000 250,000