E9.14 Fair Value Hedge: Interest Rate Swap of fixed rate debt at an annual rate of 2.5 percent, interest paid semiannually on June 30 and December 31 of each year. To hedge against falling interest rates, Greentree entered a receive fixed/pay variable interest rate swap at the Treasury bill rate plus 80 bp on a notional amount of $5 million, with the rate reset every six months. The Treasury bill rate was 2 percent on January 1,2020. On June 30, 2020, the Treasury bill rate is 2.4 percent; the swap declined in value by $5,000 and the fair value of the fixed rate debt declined by the same amount. On December 31,2020, the Treasury bill rate is 2.5 percent; the swap and fixed rate debt declined in value by another $1,000. LO 3 On January 1,2020, Greentree Foods borrowed $5 million Required Prepare the journal entries related to the debt and the swap for the year 2020. All income effects are re- corded in interest expense