User Account

All Pages

Calculate the net interest expense to be reported for note

Assignment Help Financial Accounting
Reference no: EM132645318

On January 2, 2020, Crane Corp. issues a $10-million, five-year note at LIBOR, with interest paid annually. To protect against the cash flow uncertainty related to interest payments that are based on LIBOR, Crane entered into an interest rate swap to pay 6% fixed and receive LIBOR based on $10 million for the term of the note. The LIBOR rate for the first year is 5.8%. The LIBOR rate is reset to 6.8% on January 2, 2021. Crane follows ASPE and uses hedge accounting. On December 31, 2020, the fair value of the swap decreased by $13,500: it increased by $4,000 on December 31, 2021. Assume that the criteria for hedge accounting under ASPE are met.

Question 1: Prepare the journal entries relating to the interest for the years ended December 31, 2020 and 2021

Question 2: Calculate the net interest expense to be reported for this note and related swap transactions as at December 3 1,2020 and 2021.

Reference no: EM132645318

Questions Cloud

What type of information is contained in nominal accounts : Which financial statement contains the information from nominal accounts and which contains the information from real accounts?
Should firm choose if cost of capital twenty-five percent : Cash flows of $500 and $275 for the next 2 years, respectively. Which investment if any, should the firm choose if the cost of capital is 25 percent?
Prepare an npv profile of the purchase : How far off could OgenSeas' cost of capital be (to the nearest 1%) before your purchase decision would change? Prepare an NPV profile of the purchase.
Which the minimum return that must be earned on a project : Which the minimum return that must be earned on a project in order to leave the firm's value unchanged is? the internal rate of return.
Calculate the net interest expense to be reported for note : Calculate the net interest expense to be reported for this note and related swap transactions as at December 3 1,2020 and 2021.
Which are weaknesses of the payback period : Which All of the following are weaknesses of the payback period EXCEPT? the difficulty of specifying the appropriate payback period
How you might inform the community of the policy : Criminal justice professionals are tasked with communicating information to the public. This communication is most often verbal, but is its purpose to explain.
Evaluating the risks of material misstatement associated : Summarize the professional auditing standards for identifying and evaluating the risks of material misstatement associated with the client firm's
Define how your delivery of the message would vary : For this Discussion, select two audiences from the list below. Then, consider how you would convey a specific message to these particular audiences.

Reviews

Write a Review

Financial Accounting Questions & Answers

  What is an incremental cash flow for a project

What concepts do we need to examine to help understand how to estimate the incremental cash flow of a project? What is an incremental cash flow for a project?

  Interest payable semiannually at a market interest rate

Roehm co issued $30,000,000 of four year 10% bonds with interest payable semiannually at a market interest rate of 8%. Determine the present value of the bonds payable, round to the nearest dollar.

  How is the presented in the bank reconciliation

Using the information given above, how is this presented in the bank reconciliation? The information is associated with Z Company as at 31 December xxx

  Prepare the calculations on a monthly basis

Allocate the above expenses as fixed, mixed, or variable expenses. Explain why Wilson-West Manufacturing needs to have a product costing system.

  Cutler education corporation developed a software product

Cutler Education Corporation developed a software product to help children under age 12 to learn mathematics.

  What is a multinational corporation

Describe the current International Monetary System. How does the current system differ from the system that was in place prior to August 1971?

  Determine net present value of the proposed investment

Determine net present value of the proposed investment and What is the present value payback period, in years

  Tara incorporates her sole proprietorship transferring it

tara incorporates her sole proprietorship transferring it to recently formed black corporation. the assets transferred

  Prepare the adjusting entry required

The trial balance, prior to the adjustment for this year's estimate, reflects a debit balance of $30,000 in the Allowance for Doubtful Accounts. Management considers anything over (under) +/- $10,000 a material amount.

  Capital expenditure

Betterments are a type of capital expenditure

  Preparing financial reports for corporate entities

What are the ethical requirements associated with preparing financial reports for corporate entities, including conflict of interest, confidentiality

  Prepare adjusting entries that were made by the dunbar zoo

Prepare the adjusting entries that were made by the Dunbar Zoo on December 31, 2017. If no adjusting entry is required, please type "NO ENTRY"

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd