CPA Far Quiz
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SELECT FINANCIAL STATEMENT ACCOUNTS
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Pinnacle Corp acquired a derivative instrument (interest rate swap) on January 1. The derivative is not designated as a hedge. During the first quarter, interest rates declined, causing the derivative's fair value to increase from $0 to $45,000. In the second quarter, rates increased, causing the fair value to decrease to $12,000. Pinnacle properly classifies changes in derivative values as non-operating items.
What is the cumulative impact on Pinnacle's net income through the end of the second quarter from this derivative investment?
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