On September $30,2023,$ Peace Frog International $($PFI$)($a U$.$S$.-$based company$)$ negotlated a two$-$year, $1,400,000$ Chinese yuan Ioan

from a Chinese bank at an interest rate of $2$ percent per year. The company makes interest payments annually on September $30$ and

will repay the principal on September $30,2025.$ PFI prepares U$.$S$.$ dollar financial statements and has a December $31$ year$-$end.

Relevant exchange rates are as follows:

Required:

a$.$ Prepare all journal entries related to this foreign currency borrowing.

b$.$ Taking the exchange rate effect on the cost of borrowing into consideration, determine the U$.$S$.$ dollar "effective borrowing rate" on

the loan in each of the three years $2023,2024,$ and $2025.$

Answer is not complete.

Complete this question by entering your answers in the tabs below.

Taking the exchange rate effect on the cost of borrowing into consideration, determine the effective interest rate in U$.$S$.$

dollars on the loan in each of the three years $2023,2024,$ and $2025.$

Note: Do not round intermediate calculations.