On September 30, 2015, Ericson Company negotiated a two-year, 1,700,000 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, 2017. Ericson prepares U.S.-dollar financial statements and has a December 31 year-end.

September 30, 2015	$	0.170
December 31, 2015		0.175
September 30, 2016		0.190
December 31, 2016		0.195
September 30, 2017		0.220

a.	Prepare all journal entries related to this foreign currency borrowing assuming the above exchange rates for 1 dudek. Determine the effective cost of borrowing in dollars in each of the three years 2015, 2016, and 2017