On January 1, 2021, JPS Industrles borrowed $220,000 from AustIn Bank by Issulng a three-year, floating rate note based on LIBOR, with Interest payable sem-annually on June 30 and December of each year. JPS entered Into a three-year Interest rate swap agreement on January 1, 2021, and designated the swap as a cash flow hedge. The Intent was to hedge the risk that Interest rates will rise, Increasing Its semi-annual Interest payments. The swap agreement called for the company to recelve payment based on a floating Interest rate on a notional amount of $220,000 and to pay a 4.0% fixed Interest rate. The contract called for cash settlement of the net Interest amount semi-annually, and the rate on each reset date (June 30 and December 31) determines the varlable Interest rate for the following six months. LIBOR rates In 2021 were 4.0% at January 1,3.0% at June 30 , and 5.5% at December 31 . The fair values of the swap on those dates, obtained by dealer quotes, were as follows: Required: 1. Calculate the net settlement on June 30,2021. 2. Prepare journal entrles for the perlod January 1 to December 31 , 2021, to record the note payable and hedging instrument, necessary adjustments for changes in falr value, and settlement of the swap contract. Complete this question by entering your answers in the tabs below. Calculate the net settlement on June 30,2021 . (Round your intermediate and final answer to the nearest whole dollar.) 1 To record the debt. 2 To record interest on the note. 3 To record the change in the fair value of the derivative when LIBOR rate for June 30 reduced to 3.0%. 4 To record semi-annual interest on the note. 5 To record the net cash settlement on the swap. 6 To record the change in the fair value of the derivative when LIBOR increased to 5.5%