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.

Prepare all journal entries related to this foreign currency borrowing assuming the following exchange rates for 2 dudek:

September 30, 2017	$	0.180
December 31, 2017		0.185
September 30, 2018		0.200
December 31, 2018		0.205
September 30, 2019		0.230

1. Record the note and conversion of 1 million dudeks into $ at the spot rate.

2. Record the accrued interest for the period 9/30 12/31/17.

3. Record to revalue the note payable at the spot rate, and record the foreign exchange gain/loss thereof.

4. Record the first annual interest payment including any gain or loss on the interest payable accrued at 09/30/18.

5. Record the accrued interest for the period 9/30 12/31/18.

6. Record to revalue the note payable at the spot rate, and record the foreign exchange gain/loss thereof.

7. Record the second annual interest payment including any gain or loss on the interest payable accrued at 09/30/19.

8. Record the payment of 1 million dudek note.