On April 1, 2017, Mendoza Company borrowed 650,000 euros for one year at an interest...
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On April 1, 2017, Mendoza Company borrowed 650,000 euros for one year at an interest rate of 5 percent per annum. Mendoza must make its first interest payment on the loan on October 1, 2017 and will make a second interest payment on March 31, 2018 when the loan is repaid. Mendoza prepares U.S.-dollar financial statements and has a December 31 year-end. Prepare all journal entries related to this foreign currency borrowing assuming the following exchange rates for 1 euro: April 1, 2017 October 1, 2017 December 31, 2017 March 31, 2018 $ 1.14 1.24 1.28 1.32 View transaction list X . > Record the borrowal of the foreign loan. 2 Record the first interest payment on the foreign loan. 3 Record the year end interest accrual on the foreign loan. 4 Record the year end adjustment to the foreign loan. Credit 5 Record the second interest payment and foreign exchange loss/gain. 6 Record the repayment of the loan and foreign exchange loss/gain
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