Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please solve for the incorrect values On April 1, 2020, Mendoza Company (a U.S.-based company) borrowed 540.000 euros for one year at an interest rate

image text in transcribed

image text in transcribed

Please solve for the incorrect values

On April 1, 2020, Mendoza Company (a U.S.-based company) borrowed 540.000 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, 2020. and will make a second interest payment on March 31, 2021. 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: U.S. Dollar per Euro Date April 1, 2020 October 1, 2020 December 31, 2020 March 31, 2021 $ 1.14 1.24 1.28 1.32 No Date Debit Credit Answer is complete but not entirely correct. General Journal Cash Accounts payable (euro) x 1 04/01/2020 615,600 615,600 2 10/01/2020 16,740 Interest expense Cash o 16,740 3 12/31/2020 8,370 % Interest expense Cash x 8,370 4 12/31/2020 Foreign exchange gain or loss Accounts payable (euro) O 75,600 x 75,600 5 03/31/2021 Interest expense Interest payable (euro) Foreign exchange gain or loss Cash OOOO 8,910 8,370 5403 17.820 6 03/31/2021 X Accounts payable (euro) Foreign exchange gain or loss Cash O 691,200 21,600 712,800

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Retirement Income Recipes In R From Ruin Probabilities To Intelligent Drawdowns

Authors: Moshe Arye Milevsky

1st Edition

3030514331, 9783030514334

More Books

Students also viewed these Accounting questions