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View Full Version : Interest rate cap accounting - recording expense and FMV adjustments


superchristine
Apr 24, 2013, 03:18 PM
ABC Company buys a $10 million notional interest rate cap for $200,000.00 The entry is recorded as:

Interest Rate Cap $200,000 DR
Cash $200,000 CR

A schedule of caplet expenses is provided, and the first one is $400.00. How should this expense be recorded? How should the fair market value adjustment be recorded?