Tuba Co. enters into a “receive variable, pay fixed” interest swap on January 1, 20×1 for a notional amount of ₱1,000,000. Under the terms of

Tuba Co. enters into a “receive variable, pay fixed” interest swap on January 1, 20×1 for a notional amount of ₱1,000,000. Under the terms of the contract, if the current rate increases above 12% (i.e., the set rate), Tuba Co. shall receive the excess interest. If the current rate falls below 12%, Tuba Co. shall pay the deficiency. Swap payment shall be made on December 31, 20×2. The current rates are as follows: Jan. 1, 20×1……………………………12% Jan. 1, 20×2……………………………15% How much is the net cash settlement on December 31, 20×2? 30,0000 payment 30,000 receipt 26,087 payment 26,087 receipt

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