On October 31, 2012, Darling Company negotiated a two-year 100,000 franc loan from a foreign...
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Accounting
On October 31, 2012, Darling Company negotiated a two-year 100,000 franc loan from a foreign bank at an interest rate of 3 percent per year. Interest payments are made annually on October 31, and the principal will be repaid on October 31, 2014. Darling 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:
Franc Rate
Oct. 31, 2012
$0.50
Dec. 31, 2012
$0.52
Oct. 31, 2013
$0.60
Dec. 31, 2013
$0.62
Oct. 31, 2014
$0.75
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