Sunny Corporation has $$1,000,000$ in fixed rate debt, with an annual interest rate of $3\%,$ and interest payments due June $30$ and December $31$ of each year. On January $1,2020,$ it entered a receive fixed$/$pay variable interest rate swap, where the variable rate is LIBOR plus $20$ bp$.$ On January $1,2020,$ LIBOR is $1\mathrm{.}6\%.$ On June $30,2020,$ LIBOR declines to $1\mathrm{.}2\%$ and causes the variable rate to be reset at that time. The swap qualifies for hedge accounting.

Suppose the swap contract changed in value by $$60,000$ as of June $30,2020.$ How does Sunny record this change in value?

Gain reported in income

Loss reported in income

Loss reported in OCI

Not recorded

Sunny Corporation has $$1,000,000$ in fixed rate debt, with an annual interest rate of $3\%,$ and interest payments due June $30$ and December $31$ of each year. On January $1,2020,$ it entered a receive fixed$/$pay variable interest rate swap, where the variable rate is LIBOR plus $20$ bp$.$ On January $1,2020,$ LIBOR is $1\mathrm{.}6\%.$ On June $30,2020,$ LIBOR declines to $1\mathrm{.}2\%$ and causes the variable rate to be reset at that time. The swap qualifies for hedge accounting.

Suppose the fixed rate debt changed in value by $$80,000$ as of June $30,2020.$ How does Sunny record this change in value?

Gain reported in income

Loss reported in income

Loss reported in OCI

Not recorded

Sunny Corporation has $$1,000,000$ in fixed rate debt, with an annual interest rate of $3\%,$ and interest payments due June $30$ and December $31$ of each year. On January $1,2020,$ it entered a receive fixed$/$pay variable interest rate swap, where the variable rate is LIBOR plus $20$ bp$.$ On January $1,2020,$ LIBOR is $1\mathrm{.}6\%.$ On June $30,2020,$ LIBOR declines to $1\mathrm{.}2\%$ and causes the variable rate to be reset at that time. The swap qualifies for hedge accounting.

Suppose the same facts as above, except Sunny Corporation has variable rate debt, with interest payments at LIBOR plus $20$ bp$,$ and enters a receive variable$/$pay fixed interest rate swap, with the annual fixed rate set at $3\%.$ The swap changed in value by $$60,000$ as of June $30,2020.$ How does Sunny record this change in value?

Gain reported in income

Loss reported in income

Loss reported in OCI

Not recorded