Roland Brothers, Inc. purchased equipment from a British firm for 120,000 on April 1, 2024. To finance

Question:

Roland Brothers, Inc. purchased equipment from a British firm for £120,000 on April 1, 2024. To finance the purchase of the equipment, the president of the company signed a note for £120,000 with a British bank. The loan is denominated in pounds, matures on March 31, 2025, 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:

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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