On September 30, 2017, Ericson Company negotiated a two-year, 1,000,000 dudek loan from a foreign bank at
Question:
a. Prepare all journal entries related to this foreign currency borrowing assuming the following exchange rates for 1 dudek:
September 30, 2017 .......................... $0.100
December 31, 2017 ........................... 0.105
September 30, 2018 ........................... 0.120
December 31, 2018 ........................... 0.125
September 30, 2019........................... 0.150
b. Taking the exchange rate effect on the cost of borrowing into consideration, determine the effective interest rate in dollars on the loan in each of the three years 2017, 2018, and 2019.
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...
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a 93017 Cash 100000 Note payable dudek 1000000 x 10 100000 To record the note and conversion of 1 million dudeks into at the spot rate 123117 Interest ...View the full answer
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Related Book For 
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni
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