Journal entries for borrowing Sappi Limited, a South African paper company, reports non-current Interest-Bearing Borrowings of $1,634 million at September 30, 2006. Sappi Limited applies IFRS, and reports its results in millions of U.S. dollars. At September 30, 2007, this balance had increased to $1,828 million. Assume that on March 30, 2007, Suppi Limited borrowed $1,200 million from a local bank. The loan bears interest at an annual rate of 7.5% and is due on March 31, 2009. Assume also that Sappi Limited makes its interest payments once per year on the last day of March. Sappi Limited’s fiscal year begins October 1 and ends on September 30. The firm closes its books on September 30 of each war.

a. What journal entry did Sappi Limited record for the repayment of debt during the fiscal year ending September 30, 2007?

b. Present the journal entries that Sappi Limited made in fiscal years ending September 30, 2007, 2008, and 2009, related to the bank loan obtained on March 30, 2007.