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Hay Co. enters intoa receive fixed, pay variable interest rate swap on July 1, 20x1 for a notional amount of $ 3,000,000. The set rate
Hay Co. enters intoa "receive fixed, pay variable" interest rate swap on July 1, 20x1 for a notional amount of $ 3,000,000. The set rate is 12% equal to the current rate of July 1, 20x1. Cash settlement is due on July 1, 20x3.Information on market rates follows:
July 1, 20x1.............12% July 1, 20x2.............9% July 1, 20x3.............13%
Requirements: a) How much is the derivative asset ( liability) to be presented in Hay's june 30, 20x2 statement of financial position? b) How much is gain (loss) recognized on settlement date?
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