ABC Co$.$ issues a $4-$year, $7\mathrm{.}5\%$ fixed rate interest only, non$-$prepayable $$1,000,000$

note payable on December $31,2022.$ It decides to change the interest rate from a

fixed rate to variable rate and enters into a swap agreement with M&S Corp. The

swap agreement specifies that ABC Co$.$ will receive a fixed rate at $7\mathrm{.}5\%$ and pay

variable with se$\backslash$lement dates that match the interest payments on the debt.

Assume that interest rates have declined during $2023$ and that ABC Co$.$ received

$$13,000$ as an adjustment to interest expense for the se$\backslash$lement at December $31,$

$2023.$ The loss related to the debt $($due to interest rate changes$)$ was $$48,000.$ The

value of the swap contract increased $$48,000.$

Instruc$9$ons

a$)$ Prepare the journal entry to record the payment of interest expense on

December $31,2023.$

b$)$ Prepare the journal entry to record the receipt of the swap se$^$lement on

December $31,2023.$

c$)$ Prepare the journal entry to record the change in the fair value of the swap

contract on December $31,2023.$

d$)$ Prepare the journal entry to record the change in the fair value of the debt on

December $31,2023.$