SOLUTION TO PROBLEM 1: INTEREST RATE FLOOR

T-1 On purchase of interest rate floor trade:

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T-2 On accounting for premium on purchase of interest rate floor trade:

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T-3 On accounting of premium received at Bank account:

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T-4 On valuation of interest rate floor as on date:

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T-5 On accounting of interest accrued on valuation date:

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T-6 On reversal of interest accrued on valuation date:

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T-7 On accounting of interest on interest rate floor:

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T-8 On reversal of net present value of interest rate floor:

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T-9 On valuation of interest rate floor as on date:

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T-10 On accounting of interest accrued on valuation ...

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