What amount of derivative asset should confused co

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On Jan. 1, 20x1, Confused Co. enters into an interest rate swap on a ?2,000,000 loan whereby Confused Co. agrees to receive variable interest and pay fixed interest of 9%. Swap payments shall be made every Dec. 31 in the next three years.

The following are the current market rates:

Jan. 1, 20x1...........9%

Jan. 1, 20x2..........8%

Jan. 1, 20x3...........12%

Problem 1: What amount of derivative asset (liability) should Confused Co. recognize on Dec. 31, 20x1?

a. (17,147)

b. 17,147

c. (35,665)

d. 35,665

Reference no: EM132905534

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