Question
Require information on January first 2020 four, avalanche corporation borrowed a 138000 from first bank by issuing a 2 year 8% fixed rate. Note with
Require information on January first 2020 four, avalanche corporation borrowed a 138000 from first bank by issuing a 2 year 8% fixed rate. Note with annual interest payments. The principal of the note is due. December 31st 2025 avalanche wanted to edge against declines in general interest rates. So it also entered into a 2 year So FR base interest rate swap agreement on January 1st 2024 and. Designates It is as fair as a fair value edge because the swap is entered at market rates the fair value of the swap 0 at inception, the agreement call for the company to receive fixed interest at the current So FR swap rate of 5% and pay floating interest tie to So FR disarraignment results in an effective veritable rate on the note of So. F. R3 % the contract specifies that the floating rate resets each year on June 30th. And December 31st for the next settlement. That is due the following. in other words, the next cash settlement is calculated using beginning of. rates the So FR rate on the swap reset dates and the fair value of the swap obtained from a therivative dealer are as follows. Avalanche meets all criteria for hydrocarbon using the shortcut method to calculate the net cash settlement at each settlement date during to 1024 and 2025 3 compared to journal entries during to 1024 2 record the insurance of the note. Interest net cast settlement for the interest rate swap and necessary adjustments for changes and clear value under shortcut method for prepare the journal entries during to thousand twenty 52 record interest net cash settlement for the interest rate swap necessary adjustments for the changes in fair value and repavement of the debts complete this Question by entering your answers in the tabs below. Calculate the next cast settlement at each settlement date during to 000242025. No indicate payments amounts with a minus sign
Calculate the net cash settlement at each settlement date during to 1024 and 2025. No indicate payment amounts with a minus sign
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