Journal Entry Descriptions To Be Used:

• No journal entry required
• Accounts payable
• Accounts receivable
• Accumulated depreciation
• Advertising expense
• Allowance for credit losses
• Allowance for uncollectible accounts
• Bad debt expense
• Bonds payable
• Building
• Call option
• Cash
• Cash surrender value of life insurance
• Common stock
• Cost of goods sold
• Deferred revenue
• Depreciation expense
• Discount on bonds payable
• Dividend revenue
• Dividends
• Equipment
• Fair value adjustment
• Furniture and fixtures
• Futures contract
• Gain on settlement of call option
• Gain on settlement of put option
• Income summary
• Income tax expense
• Income tax payable
• Insurance expense
• Interest expense
• Interest payable
• Interest rate swap
• Interest receivable
• Interest revenue
• Inventory
• Investment in bonds
• Investment in equity securities
• Investment revenue
• Land
• Loss on settlement of call option
• Loss on settlement of put option
• Maintenance expense
• Miscellaneous expense
• Notes payable
• Notes receivable
• Premium on bonds payable
• Prepaid advertising
• Prepaid insurance
• Prepaid rent
• Put option
• Reclassification adjustmentOCI
• Rent expense
• Retained earnings
• Salaries and wages expense
• Salaries and wages payable
• Sales revenue
• Service revenue
• Supplies
• Supplies expense
• Utilities expense
• Utilities payable

On January 2, 2022, Hill Corp. issued 5-year, $1,000,000 bonds at par. Interest is payable annually on December 31 at a stated fixed rate of 5.0%. To mitigate interest rate risk, Hill Corp. entered into a 5-year interest rate swap with a swap bank on January 2, 2022. Terms of the contract were as follows: Hill Corp. agreed to pay a variable rate of interest to the swap bank. In return, Hill Corp. will receive fixed rate interest from the swap bank. Interest rates during 2022 were the following: Date January 2, 2022 December 31, 2022 Fixed rate 5.08 5.08 Market rate 5.08 4.28 As a result of the decrease in the market interest rate during 2022, both the debt obligation and swap contract increased during 2022. Specifically, as of December 31, 2022, the bond liability and interest rate swap had a fair value of $1,028,903 and $28,903, respectively. Required: 1. Prepare the appropriate journal entry or entries for each transaction. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 2. Indicate any amounts that Hill Corp. would report in its December 31, 2022 balance sheet and income statement related to the interest rate swap. Req 1 Reg 2 Prepare the appropriate journal entry or entries for each transaction. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) General Journal Credit No 1 Event 1 Debit 1,000,000 Accounts payable Bonds payable 1,000,000 N 2 50,000 Interest expense Accounts payable 50,000 3 3 8,000 Interest revenue 8,000 4 4 28,903 Bonds payable 28,903 5 5 28,903 28,903 Reg 1 Reg 2 Indicate any amounts that Hill Corp. would report in its December 31, 2022 balance sheet and income statement related to the interest rate swap. Balance Sheet (partial): Current assets: Long-term liabilities: Income Statement (partial)