Question $1$: Account for the following using Hedge Accounting. How and why do the treatments differ?

$($a$)$ On $4.$ January x$1$ a company has taken out a long$-$term loan in the amount of $100000$ with a fixed interest rate $($i $=7\%).$ In order to hedge itself against changes in the fair value, the company purchases at the same time a market$-$priced receiver interest swap $($interest adjusted once a year: EURIBOR $+350$ basis points$)$ and designates a fair value hedge. By $31.$ December x$1$ the EURIBOR has decreased, the swap has a positive fair value of $12000.$ Valuation of the loan has changed by $+11000.$

Task: Calculate effectiveness according to the Dollar Offset method. Provide the journal entries as of $4\mathrm{.}1.$x$1$ and $31\mathrm{.}12.$x$1.$

$($b$)$ On $4.$ January x$1$ Entity D is expecting with a very high probability the purchase of steel dated $31.$ December xI by a US supplier at the price of $180000$ USD. The functional currency of Entity D is $.$ The contract is in USD. Currency exchange rate is $1\mathrm{.}8$ USD$/.$ In order to safeguard itself against currency exchange risks, entity D buys a forward contract over $180000$ USD at the exchange rate of $1\mathrm{.}8$ USD$/($FV $=0).$

Task: Provide the journal entries per $4\mathrm{.}1.$x$1,30\mathrm{.}6.$x$1$ and $31\mathrm{.}12.$x$1.$ Assume that the exchange rate is $2\mathrm{.}0$ USD$/$ on $30\mathrm{.}6.$x$1$ and $1\mathrm{.}5$ USD$/$ on $31\mathrm{.}12.$x$1.$ Assume that the hedge is effective. Exclude the interest component in the forward $($forward points$).$