problem 30

March 1, 2018. What is the effect of the exchange rate fluctuations on reported income in 2017 and in 2018? 30. On September 30, 2017, Ericson Company negotiated a two-year, 1,000,000 dudek loan from a for- eign bank at an interest rate of 2 percent per year. It makes interest payments annually on Septem- ber 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 1 dudek: September 30, 2017 December 31, 2017 September 30, 2018 December 31, 2018 September 30, 2019 $0.100 0.105 0.120 0.125 0.150 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. 31. Brandlin Company of Anaheim, California, sells parts to a foreign customer on December 1, 2017, with payment of 16.000 korunas to be received on March 1, 2018. Brandlin enters into a forward