On December 30, 2019, ABC signed a loan of $ 441,498 with Bank B at 7%. The loan pays interest annually. On the same date, ABC acquired an interest swap with a principal (notional amount) of $ 441498 from Bank Z to change the annual fixed-rate debt to the floating rate (market) reported on December 31 of the previous period. The market interest rate on December 31, 2019 was 9% and that of December 31, 2020 was 5%. ABC prepares financial statements every December 31. How much will ABC report as interest expense in the Statement of Income and Expenses for the period ending December 31, 2020?

Select one:

a. 39734.82

b. 8829.96

c. 30904.86

d. 22074.90

According to the data from the previous question, ABC will probably report this derivative in its Statement of Financial Position of December 31, 2020 as Select one: a. an income. b. a debt. c. an active. d. an equity account.