On September 30, 2023, Peace Frog International (PFI) (a U.S.-based company) negotiated a twoyear, 1,000,000 Chinese yuan

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On September 30, 2023, Peace Frog International (PFI) (a U.S.-based company) negotiated a twoyear, 1,000,000 Chinese yuan loan 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:

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.

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a b 93023 Cash Note Payable CNY 1000000 x 010 To record the note and convers...View the full answer

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Question Posted: Jun 23, 2023 01:59 AM

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On September 30, 2023, Peace Frog International (PFI) (a U.S.-based company) negotiated a twoyear, 1,000,000 Chinese yuan

Question:

Date September 30, 2023 December 31, 2023 September 30, 2024 December 31, 2024 September 30, 2025 U.S. Dollar per Chinese Yuan (CNY) $0.100 0.105 0.120 0.125 0.150

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a b 93023 Cash Note Payable CNY 1000000 x 010 To record the note and convers...View the full answer

Advanced Accounting

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