A Company Has a Receive Variable/pay Fixed Interest Rate Swap

Multiple Choice

A company has a receive variable/pay fixed interest rate swap that qualifies as an effective hedge of its variable rate debt. When it enters the swap agreement, it records the swap investment at what amount?

A) The sum of expected swap receipts/payments.
B) The expected swap receipt/payment for the coming year.
C) The present value of expected swap receipts/payments.
D) No entry is recorded until swap receipts/payments are made.