Check my wo On January 1, 2018, S&S Corporation invested in LLB Industries negotiable two-year, 10% 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, 2018, 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 10% fixed interest rate on a notional amount of $200,000 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 10% at January 1 , 8% at March 31, and 6% June 30, 2018. 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: March 31 $ 6,472 $206,472 June 30 11,394 $211,394 January 1 Fair value of interest rate swap Fair value of note payable 0 $200,000 Required: 1. Calculate the net cash settlement at March 31 and June 30, 2018. 2. Prepare the journal entries through June 30, 2018, to record the Investment in notes, interest, and necessarv Saved Help Save & Exit Check my w Required: 1. Calculate the net cash settlement at March 31 and June 30, 2018. 2. Prepare the journal entries through June 30, 2018, 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 2 Required 1 Calculate the net cash settlement at March 31 and June 30, 2018. June 30 March 31 Net cash settlement Required 2 2 4 6 7 Record the investment of the note. Note: Enter debits before credits. Date General Journal Debit Credit January 01 2 4 6 7 8 Record the net cash settlement Note: Enter debits before credits. Date General Journal Debit Credit March 31 View general journal Record entry Clear entry Mavt LO 1 2 3 5 6 7 8 Record change in fair value of the derivative. Note: Enter debits before credits. General Journal Debit Credit Date March 31 View general journal Clear entry Record entry 1 2 3 6 7 8 Record change in fair value of the investment. Note: Enter debits before credits. Date General Journal Debit Credit March 31 View general journal Clear entry Record entry Help 1 2 3 7 8 9 Record the interest. Note: Enter debits before credits. Debit Date General Journal Credit June 30 View general journal Clear entry Record entry 2 4 5 8 Record the net cash settlement. Note: Enter debits before credits. General Journal Date Debit Credit June 30 View general journal Record entry Clear entry 1 2 3 4 5 6 7 Record the change in fair value of the derivative. Note: Enter debits before credits. General Journal Date Debit Credit June 30 View general journal Record entry Clear entry Next> 2 of 3
