1. on 30 june, A company purchases 1,000 shares of XYZ Co's stock for $80 per share. Company A(which normally does not carry a portfolio of marketable equity securities) classified its investment in XYZ Co. as available-for-salePlease help me with the following two questions.

On June 30, our company borrows $25 million of 5-year 7.5 % xed-rate interest-only nonprepayable debt. We prefer variable-rate debt since our cash ows are positively correlated to the level of interest rates, and decide to enter into a xed-forvariable interest rate swap. Under the terms of the swap, we receive interest at a xed rate of 7.5% and pay interest at a variable rate equal to the six-month U.S. LIBOR, based on a notional amount of $25 million. Both the debt and the swap require that payments be made or received on December 31 and June 30. The six-month U.S. LIBOR rate on each reset date determines the variable portion of the interest-rate swap for the following six-month period. Our com- pany designates the swap as a fair value hedge of the fixed-rate debt, with changes in the fair value that are due to changes in benchmark interest rates being the specic risk that is hedged. The six-month U.S. LIBOR rates and the swap and debt fair values are assumed to be as follows for the rst year of the swap and debt agreements: Six-Month Debt U.S. LIBOR SWAP Carrying Date Hate Fair Value Value June 30 (date of borrowing} .......................... 6.00% $ 0 $25,000,000 December 31 ..................................... 5.75% 68,750 25,068,750 June 30 (following year) ............................. 5.50% 137,500 25,137,500 Prepare the journal entries to record the following: a. Borrowing on June 30 (year of borrowing) b. Interest payment at December 31 0. Interest payment at June 30 (following year)