I just need help with part b. I already did part a, and I'm just giving it to you to make doing part b easier. Please do not give me the answer to part a, I only need help with part b. (a)Correct Answer (Used)Present the journal entries to record the following transactions.Your Answer(2)(3)(4)(5)(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entryfor the account titles and enter O for the amounts)DateL2020120213, 20212021The entry, if any, to record the swap on December 31, 2020.The entry to record the semiannual debt interes: payment on June 30, 2021.The entry to record the settlement of the semiannual swap amount receivables at 6%, less amount payable 31LIBOR, 5.0%The entry to record the change in the fair value of the deat on June 30, 2021.The entry to record the change in the fair value of the swap at June 30, 2021.3.2021<>><Account Titles and ExplanationNo EntryNo EntryInterest ExpenseCash(To record the semiannual debt interest payment.)CachInterest Exoense(To record the settlement of the semiannual swapamount)Unrealized Holding Cain or Edss-IncomeNotes Payable(To record the change in fair value of the debt.)Swap ContractUnrealized Holdiru Gainor Loss-Income(To record the change in fair va Le of the swap.)Debit150,20026,5009000090,000Credit16026.90.90, On December 31, 2020, Sage Corp. had a $5,340,000, 6% fixed-rate note outstanding, payable in 2 years. It decides to enter into a 2-year swap with First Regional Bank to convert the fixed-rate debt to variable-rate debt. The terms of the swap indicate that Sage willreceive interest at a fixed rate of 6% and will pay a variable rate equal to the 6-month LIBOR rate, based on the $5,340,000 amount.The LIBOR rate on December 31, 2020, is 5.0%. The LIBOR rate will be reset every 6 months and will be used to determine thevariable rate to be paid for the following 6-month period.Sage Corp, designates the swap as a fair value hedge. Assume that the hedging relationship meets all the conditions necessary forhedge accounting. The 6-month LIBOR rate and the swap and debt fair values are as follows.DateDecember 31, 2020June 30, 2021December 31, 2021(b)6-Month LIBOR Rate5.0%4.5%6.0%Swap Fair Value90,000(190,000)Balance SheetDebt Fair ValueIncome Statement$5,340,0005,430,000Indicate the amount(s) reported on the balance sheet and income statement related to the debt and swap on December 31, 2020.(If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)5,150,000

As requested only part B is solved as follows: The amount reported on the balance sheet as on…

On December 31, 2020, Sage Corp. had a $5,340,000, 6% fixed-rate note outstanding, payable in 2 years. It decides to enter into a 2- year swap with First Regional Bank to convert the fixed-rate debt to variable-rate debt. The terms of the swap indicate that Sage will receive interest at a fixed rate of 6% and will pay a variable rate equal to the 6-month LIBOR rate, based on the $5,340,000 amount. The LIBOR rate on December 31, 2020, is 5.0%. The LIBOR rate will be reset every 6 months and will be used to determine the variable rate to be paid for the following 6-month period. Sage Corp, designates the swap as a fair value hedge. Assume that the hedging relationship meets all the conditions necessary for hedge accounting. The 6-month LIBOR rate and the swap and debt fair values are as follows. Date December 31, 2020 June 30, 2021 December 31, 2021 (b) 6-Month LIBOR Rate Swap Fair Value 5.0% 4.5% 6.0% 90,000 (190,000) Debt Fair Value $5,340,000 5,430,000 5,150,000 Indicate the amount(s) reported on the balance sheet and income statement related to the debt and swap on December 31, 2020. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

On December 31, 2020, Sage Corp. had a $5,340,000, 6% fixed-rate note outstanding, payable in 2 years. It decides to enter into a 2- year swap with First Regional Bank to convert the fixed-rate debt to variable-rate debt. The terms of the swap indicate that Sage will receive interest at a fixed rate of 6% and will pay a variable rate equal to the 6-month LIBOR rate, based on the $5,340,000 amount. The LIBOR rate on December 31, 2020, is 5.0%. The LIBOR rate will be reset every 6 months and will be used to determine the variable rate to be paid for the following 6-month period. Sage Corp, designates the swap as a fair value hedge. Assume that the hedging relationship meets all the conditions necessary for hedge accounting. The 6-month LIBOR rate and the swap and debt fair values are as follows. Date December 31, 2020 June 30, 2021 December 31, 2021 (b) 6-Month LIBOR Rate Swap Fair Value 5.0% 4.5% 6.0% 90,000 (190,000) Debt Fair Value $5,340,000 5,430,000 5,150,000 Indicate the amount(s) reported on the balance sheet and income statement related to the debt and swap on December 31, 2020. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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