Question

On January 1, 2010, Edmon Inc. borrowed 5,000,000 Swedish krona (SEK) from a bank in Sweden. The loan has a four-year life and requires an annual interest payment of 4% (payable on the first of the year). The following exchange rates exist for the krona relative to the Canadian dollar:
Date ........... SEK 1 = × C$
January 1, 2010 ...... .154
December 31, 2010 ..... .157
Average 2010 ....... .161
January 1, 2011 ...... .167
December 31, 2011 .... .162
Average 2011 ...... .159
January 1, 2012 ...... .153
December 31, 2012 ... .149
Average 2012 ...... .145
January 1, 2013 ..... .147
December 31, 2013 ... .154
Average 2013 ..... .152
Required
(a) Prepare the journal entries with respect to the loan and interest for each of the years 2010 to 2013.
(b) Indicate the foreign currency gain or loss in each of the years 2010 to 2013.
(c) Calculate the balance in the loan account on the statement of financial position for each of the years 2010 to 2013.


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  • CreatedJune 09, 2015
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