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Required: What does the shortcut method allow Avalanche to assume? How does this assumption affect the application of hedge accounting? Calculate the net cash settlement
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What does the shortcut method allow Avalanche to assume? How does this assumption affect the application of hedge accounting?
Calculate the net cash settlement at each settlement date during and
Prepare the journal entries during to record the issuance of the note, interest, net cash settlement for the interest rate swap, and necessary adjustments for changes in fair value under the shortcut method.
Prepare the journal entries during to record interest, net cash settlement for the interest rate swap, necessary adjustments for changes in fair value, and repayment of the debt.
Rollforward both the swap account and the notes payable account at each settlementinterest payment date.
Calculate the net effect on earnings of the hedging arrangement for the sixmonth periods ending June and December and June and December
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