On September 30, 2017, Ericson Company negotiated a two-year, 1,800,000 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, 2019. Ericson prepares U.S.-dollar financial statements and has a December 31 year-end a. Prepare all journal entries related to this foreign currency borrowing assuming the following exchange rates for 2 dudek: September 30, 2017 December 31, 2017 September 30, 2018 December 31, 2018 September 30, 2019 $ 0.180 0.185 0.200 0.205 0.230 b. Taking the exchange rate effect on the cost of borrowing into consideration, determine the effective interest rate in dollars on the loan in each of the three years 2017, 2018, and 2019. Prepare all journal entries related to this foreign currency borrowing assuming the above exchange rates for 1 dudek. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 4 6 Record the note and conversion of 1 million dudeks into $at the spot rate Note: Enter debits before credits. Date General Journal Debit Credit 09/30/2017 4 6 7 Record the accrued interest for the period 9/30 - 12/31/17 Note: Enter debits before credits. Date General Journal Debit Credit 12/31/2017 3 4 6 7 Record to revalue the note payable at the spot rate, and record the foreign exchange gain/loss thereof Note: Enter debits before credits. Date General Journal Debit Credit 12/31/2017 4 6 Record the first annual interest payment including any gain or loss on the interest payable accrued at 09/30/18 Note: Enter debits before credits. Date General Journal Debit Credit 09/30/2018 Record the accrued interest for the period 9/30 - 12/31/18. Note: Enter debits before credits. Date General Journal Debit Credit 12/31/2018 Record to revalue the note payable at the spot rate, and record the foreign exchange gain/loss thereof ote: Enter debits before credits. Date General Journal Debit Credit 12/31/2018 Record the second annual interest payment including any gain or loss on the interest payable accrued at 09/30/19. Note: Enter debits before credits. Date General Journal Debit Credit 09/30/2019 Record the payment of 1 million dudek note Note: Enter debits before credits. Date General Journal Debit Credit 09/30/2019 Required A Required B Taking the exchange rate effect on the cost of borrowing into consideration, determine the effective interest rate in dollar the loan in each of the three years 2017, 2018, and 2019. (Do not round intermediate calculations) Effective Cost of Borrowing 2017 2019 On September 30, 2017, Ericson Company negotiated a two-year, 1,800,000 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, 2019. Ericson prepares U.S.-dollar financial statements and has a December 31 year-end a. Prepare all journal entries related to this foreign currency borrowing assuming the following exchange rates for 2 dudek: September 30, 2017 December 31, 2017 September 30, 2018 December 31, 2018 September 30, 2019 $ 0.180 0.185 0.200 0.205 0.230 b. Taking the exchange rate effect on the cost of borrowing into consideration, determine the effective interest rate in dollars on the loan in each of the three years 2017, 2018, and 2019. Prepare all journal entries related to this foreign currency borrowing assuming the above exchange rates for 1 dudek. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 4 6 Record the note and conversion of 1 million dudeks into $at the spot rate Note: Enter debits before credits. Date General Journal Debit Credit 09/30/2017 4 6 7 Record the accrued interest for the period 9/30 - 12/31/17 Note: Enter debits before credits. Date General Journal Debit Credit 12/31/2017 3 4 6 7 Record to revalue the note payable at the spot rate, and record the foreign exchange gain/loss thereof Note: Enter debits before credits. Date General Journal Debit Credit 12/31/2017 4 6 Record the first annual interest payment including any gain or loss on the interest payable accrued at 09/30/18 Note: Enter debits before credits. Date General Journal Debit Credit 09/30/2018 Record the accrued interest for the period 9/30 - 12/31/18. Note: Enter debits before credits. Date General Journal Debit Credit 12/31/2018 Record to revalue the note payable at the spot rate, and record the foreign exchange gain/loss thereof ote: Enter debits before credits. Date General Journal Debit Credit 12/31/2018 Record the second annual interest payment including any gain or loss on the interest payable accrued at 09/30/19. Note: Enter debits before credits. Date General Journal Debit Credit 09/30/2019 Record the payment of 1 million dudek note Note: Enter debits before credits. Date General Journal Debit Credit 09/30/2019 Required A Required B Taking the exchange rate effect on the cost of borrowing into consideration, determine the effective interest rate in dollar the loan in each of the three years 2017, 2018, and 2019. (Do not round intermediate calculations) Effective Cost of Borrowing 2017 2019