On 1 July 2023 Billy Ltd, an Australian company, borrows US$1.54 million at a rate of 6 percent from a United States bank for a period of three years.

On the same date Rip Ltd, also an Australian company, borrows A$2.2 million from an Australian bank at a rate of 6 per cent for three years.

Both companies have a 30 June reporting date. The companies decide to swap their interest and principal obligations. It is assumed that the required market rate on both loans is 6 percent, and remains at 6 percent throughout the terms of the loans. The relevant exchange rates are:

Provide the journal entries in the books of both Billy Ltd and Rip Ltd for 1 July 2023 and 30 June 2024.

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1 July 2023 A$1.00 = US$0.70 30 June 2024 A$1.00 US$0.67