Roland Brothers, Inc. purchased equipment from a British firm for 120,000 on April, 2014. To...
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Roland Brothers, Inc. purchased equipment from a British firm for 120,000 on April, 2014. To finance the purchase of the equipment, the president of the company signed a note for 120000 with a British bank. The loan is denominated in pounds, matures on March 31, 2015, and bears interest at 12% per annum payable on June 30, is denominated in pounds, matures on March 31, 2015, and bears interest at 12% per annum payable on June 30, September 30, December 31, and March 31. Spot rates for the British pound are as follows:
April 1, 2014 $ 1.574
June 30, 2014 $ 1.560
September 30, 2014 $ 1.526
December 31, 2014 $ 1.498
March 31, 2015 $ 1.538
Required Prepare journal entries to record the purchase of the equipment, the interest payments, the adjustment of the accounts on December 31, (the fiscal year-end), and the payment of the note at maturity.
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