On April 1, 2017, Mendoza Company borrowed 514,000 euros for one year at an interest rate of 5 percent per annum. Mendoza must make its first interest payment on the loan on October 1, 2017, and will make a second interest payment on March 31, 2018, when the loan is repaid. Mendoza prepares U.S.-dollar financial statements and has a December 31 year-end. Prepare all
April 1, 2017 | $ 1.10 |
October 1, 2017 | 1.20 |
December 31, 2017 | 1.24 |
March 31, 2018 | 1.28 |
Prepare all journal entries
1 Record the borrowal of the foreign loan.
2 Record the first interest payment on the foreign loan.
3 Record the year-end interest accrual on the foreign loan.
4 Record the year-end adjustment to the foreign loan.
5 Record the second interest payment and foreign exchange loss/gain.
6 Record the repayment of the loan and foreign exchange loss/gain.
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