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Please answer 1,2,3 Thank youuu Problem 11-11 (IAA) On January 1, 2021, Trece Company borrowed P5,000,000 will be paid annually to the bank on December
Please answer 1,2,3 Thank youuu
Problem 11-11 (IAA) On January 1, 2021, Trece Company borrowed P5,000,000 will be paid annually to the bank on December 31 and the from a bank at a variable rate of interest for 4 years. Interest principal is due on December 31, 2024. Under the agreement, the market rate of interest every January 1 resets the variable rate for that period and the amount of interest to be paid on December 31. In conjunction with the loan, Trece Company entered into a "receive variable, pay fixed" interest rate swap agreement with another bank speculator. as a cash The interest rate swap agreement was designated flow hedge. The market rates of interest are: 10% 14% January 1, 2021 January 1, 2022 January 1, 2023 January 1, 2024 12% 11% The PV of an ordinary annuity of 1 is 2.32 at 14% for three periods, 1.69 at 12% for two periods and 0.90 at 11% for one period. 1. What amount should be reported as derivative asset or liability on December 31, 2021? a. 464,000 asset b. 464,000 liability c. 600,000 asset d. 600,000 liability 2. What amount should be reported as derivative asset or liability on December 31, 2022? a. 200,000 asset b. 200,000 liability C. 169,000 asset d. 169,000 liability 3. What amount should be reported as derivative asset or liability on December 31, 2023? a. 45,000 asset b. 45,000 liability c. 50,000 asset d. 50,000 liability 322 Step by Step Solution
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