4.On September 30, 2017, Ericson Company negotiated a two-year, 1,800,000 dudek loan from a foreign bank at an interest rate of 4 percent per year. It makes interest payments annually on September 30 and will repay the principal on September 30, 2019. Ericson prepares U.S.-dollar financial statements and has a December 31 year-end.

(a) What are all journal entries related to this foreign currency borrowing assuming the following exchange rates for 2 dudek:

(b) Taking the exchange rate effect on the cost of borrowing into consideration, determine the effective interest rate in dollars on the loan in each of the three years 2017, 2018, and 2019.

Journal entry worksheet 2 3 4 5 6 7 8 Record the note and conversion of 1 million dudeks into $ at the spot rate. Note: Enter debits before credits. Date General Journal Debit Credit 09/30/2017 Record entry Clear entry View general journalJournal entry worksheet