) For ensuring an adequate amount of cash flow needed for the payment of regular operating...

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) For ensuring an adequate amount of cash flow needed for the payment of regular operating expenses, a loan of $1,500,000 was extended to Sophia Limited by Polish Limited in July 2023 when the exchange rate was FC 1 = $1. The loan carries an interest of 6% and has a fixed schedule of repayment. Interest on the loan is payable on 31 December and the interest expense has been included under operating expenses. However, the accountant of Sophia Limited forgot to take into account of the exchange rate difference when she computed the ending balance of the loan as at 31 October 2023. Other relevant exchange rates: 1 Sept. 2021 1 Oct. 2021 31 Oct. 2022 1 Nov. 2022 31 Oct. 2023 Dividend payment date Average rate for 2023 FC 1= $0.80 $0.82 $0.81 $0.81 $0.75 $0.78 $0.79 quired: a. For Sophia Limited, prepare the journal entry for the exchange gain/(loss) relating to the loan from Polish Limited. (Assuming there is no tax effect.) ) For ensuring an adequate amount of cash flow needed for the payment of regular operating expenses, a loan of $1,500,000 was extended to Sophia Limited by Polish Limited in July 2023 when the exchange rate was FC 1 = $1. The loan carries an interest of 6% and has a fixed schedule of repayment. Interest on the loan is payable on 31 December and the interest expense has been included under operating expenses. However, the accountant of Sophia Limited forgot to take into account of the exchange rate difference when she computed the ending balance of the loan as at 31 October 2023. Other relevant exchange rates: 1 Sept. 2021 1 Oct. 2021 31 Oct. 2022 1 Nov. 2022 31 Oct. 2023 Dividend payment date Average rate for 2023 FC 1= $0.80 $0.82 $0.81 $0.81 $0.75 $0.78 $0.79 quired: a. For Sophia Limited, prepare the journal entry for the exchange gain/(loss) relating to the loan from Polish Limited. (Assuming there is no tax effect.) ) For ensuring an adequate amount of cash flow needed for the payment of regular operating expenses, a loan of $1,500,000 was extended to Sophia Limited by Polish Limited in July 2023 when the exchange rate was FC 1 = $1. The loan carries an interest of 6% and has a fixed schedule of repayment. Interest on the loan is payable on 31 December and the interest expense has been included under operating expenses. However, the accountant of Sophia Limited forgot to take into account of the exchange rate difference when she computed the ending balance of the loan as at 31 October 2023. Other relevant exchange rates: 1 Sept. 2021 1 Oct. 2021 31 Oct. 2022 1 Nov. 2022 31 Oct. 2023 Dividend payment date Average rate for 2023 FC 1= $0.80 $0.82 $0.81 $0.81 $0.75 $0.78 $0.79 quired: a. For Sophia Limited, prepare the journal entry for the exchange gain/(loss) relating to the loan from Polish Limited. (Assuming there is no tax effect.) ) For ensuring an adequate amount of cash flow needed for the payment of regular operating expenses, a loan of $1,500,000 was extended to Sophia Limited by Polish Limited in July 2023 when the exchange rate was FC 1 = $1. The loan carries an interest of 6% and has a fixed schedule of repayment. Interest on the loan is payable on 31 December and the interest expense has been included under operating expenses. However, the accountant of Sophia Limited forgot to take into account of the exchange rate difference when she computed the ending balance of the loan as at 31 October 2023. Other relevant exchange rates: 1 Sept. 2021 1 Oct. 2021 31 Oct. 2022 1 Nov. 2022 31 Oct. 2023 Dividend payment date Average rate for 2023 FC 1= $0.80 $0.82 $0.81 $0.81 $0.75 $0.78 $0.79 quired: a. For Sophia Limited, prepare the journal entry for the exchange gain/(loss) relating to the loan from Polish Limited. (Assuming there is no tax effect.)

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