Question
On April 01, 2016, ABC Inc., a Canadian Corporation, obtained a 3-year loan in US$ funds from a bank in Boston (USA). Details are as
On April 01, 2016, ABC Inc., a Canadian Corporation, obtained a 3-year loan in US$ funds from a bank in Boston (USA). Details are as follows:
- Four year term loan, U.S. $500,000 - Interest is 6% payable Dec 31 every year - ABC Inc.'s fiscal-end is on December 31.
Exchange rates:
| 1 January 20X6 | U.S. $1 = Cdn. $1.35 |
| 31 December 20X6 | U.S. $1 = Cdn. $1.40 |
| 31 December 20X7 | U.S. $1 = Cdn. $1.42 |
| 31 December 20X8 | U.S. $1 = Cdn. $.136 |
| 31 December 20X9 | U.S. $1 = Cdn. $1.39 |
Note: The average interest rate for the period from April 01, 2016 to December 31, 2016 was US$1 = Cdn$1.38
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started