On January 1, 20x1, Pink Floyd enters into an interest rate swap for a notional amount of 1,000,000. Under the agreement, Pink Floyd Co. shall receive variable interest and pay fixed interest based on a fixed rate of 6%. Swap payments shall be made at the end of each year in the next three years.

The following are the current market rates: Jan.1, 20x1 6% Jan.1, 20x2 7% Jan.1, 20x3 4%

Provide Journal Entries