Use the Following Information to Answer Questions Bellow

Multiple Choice

Use the following information to answer Questions bellow
A company has $1,000,000 in 2.8% fixed rate debt, with interest due on December 31 of each year. On January 1 it swaps its fixed interest payments for variable payments at the Treasury bill rate plus 0.7%. The current Treasury bill rate is 1.9%. The swap qualifies as a fair value hedge of the fixed payments. The company's accounting year ends December 31, and all income effects of the loan and the swap are reported in interest expense. On December 31, the Treasury bill rate has increased to 2.2%, increasing the variable payments on the swap for the following year. The swap value and the loan value each change by $80,000.
-The change in the value of the loan

A) Reduces interest expense.
B) Increases other comprehensive income.
C) Increases interest expense.
D) Is not recorded.