Question
On 1 July 2019, OZ Ltd, an Australian company, enters into an agreement to borrow US$2 million from Washington Ltd, a US company. Washington Ltd
On 1 July 2019, OZ Ltd, an Australian company, enters into an agreement to borrow
US$2 million from Washington Ltd, a US company. Washington Ltd sends the loan money to OZ Ltd's US bank account. The loan is for three years and requires the payment of interest at the rate of 8 per cent on 30June each year. OZ Ltd's reporting date is 30 June.OZ Ltd's presentation currency is Australia dollars.
The relevant exchange rates are:
1 July 2019
A$1.00 = US$ 0.70
30 June 2020
A$1.00 = US$ 0.80
Required
Provide journal entries in the books of OZ Ltd to account for the above transaction on 1 July 2019 and 30 June 2020.
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Retailing Management
Authors: Michael Levy, Barton Weitz, Dea Watson
4th Canadian Edition
70893209, 978-0070893207
