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On April 1, 2017, Mendoza Company borrowed 502,000 euros for one year at an interest rate of 5 percent per annum. Mendoza must make its
On April 1, 2017, Mendoza Company borrowed 502,000 euros for one year at an interest rate of 5 percent per annum. Mendoza must make its first interest payment on the loan on October 1, 2017 and will make a second interest payment on March 31, 2018 when the loan is repaid. Mendoza prepares U.S.-dollar financial statements and has a December 31 year-end. Prepare all journal entries related to this foreign currency borrowing assuming the following exchange rates for 1 euro:
April 1, 2017 | $ | 1.10 | |
October 1, 2017 | 1.20 | ||
December 31, 2017 | 1.24 | ||
March 31, 2018 | 1.28 | ||
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