At what amount does enterprise fund report interest expense

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Question - On April 1, 2020, an enterprise fund issued $2,000,000 in variable rate debt, with interest paid on March 31 of each year, the fiscal year-end. The rate is reset annually. The variable rate for fiscal 2021 is 3.5%. On the same date, the fund entered a receive variable/pay fixed interest rate swap, where the fund pays a 3.6% fixed rate to a counterparty. By the end of fiscal 2021, the variable rate fell to 3.3% and the swap declined in value by $8,000. The swap qualifies for hedge accounting, per SGAS 53.

At what amount does the enterprise fund report interest expense on its operating statement?

A. $70,000

B. $72,000

C. $80,000

D. $64,000

Reference no: EM132800565

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