On June 30, our company borrows $25 million of 5-year 7.5% fixed-rate interest-only nonprepayable debt. We prefer variable-rate debt since our cash flows are positively correlated to the level of interest rates, and decide to enter into a fixed-for-variable interest rate swap. Under the terms of the swap, we receive interest at a fixed 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 any 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 specific 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 first year of the swap and debt agreements: Prepare the journal entries to record the following: a. Borrowing on June 30 (year of borrowing) b. Interest payment at December 31 c. Interest payment at June 30 (following year)