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1 July 2018, G Ltd, an Australian company, borrows US$2 000 000 at 10% from a US firm, repayable in US dollars after 5 years.
1 July 2018, G Ltd, an Australian company, borrows US$2 000 000 at 10% from a US firm, repayable in US dollars after 5 years. Although G Ltd trades predominantly within Australia, the loan is not in such favourable terms as could be obtained within Australia D Ltd, an Australian company, borrows A$2 000 000 from an Australian bank at a fixed rate of 12% for 5 years at the same time. D Ltd has a number of receivables denominated in US dollars. To attain perceived benefits, both parties decide to swap their loan interest and principal obligations on the same date that they take out the loans, which is 1 July 2018. Under the swap terms, both agree to take control of the other party's principal and interest obligations. The relevant exchange rates are: 1 July 2018 A$1 = US$0.98 30 June 2019 A$1 = US$0.95 Following the swap, G Ltd's foreign currency principal obligation is effectively fixed at the rate ih place at the time of the swap Required: Provide journal entries in the book of G Ltd (use rounding $ amount). IT IS VERY URGENT PLEASE
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