On April 1, 2017, Mendoza Company borrowed 550,000 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 October 1, 2017 December 31, 2017 March 31, 2018 1.14 1.24 1.28 1.32 Answer is complete but not entirely correct. Date General Journal Debit Credit 04/01/2017 Cash 627,000 Note payable (euro) 627,000 10/01/2017 Interest expense (euro) 17,690 Cash 17,690 12/31/2017 Interest expense (euro) 8,662 2 17,690 8 10/01/2017 Interest expense (euro) Cash 17,690 12/31/2017 Interest expense (euro) 8,662 Interest payable (euro) 8,662 4 12/31/2017 703,998 Foreign currency (euro) Note payable (euro) 703,998 94,380 94,380 290 03/31/2018 Interest expense (euro) Interest payable (euro) Foreign exchange loss Cash 188,760 6 03/31/2018 Note receivable (euro) Foreign exchange loss 702,800 23,200 Cash 726,000