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QUESTION S AUS company borrows 100,000,000 by issuing bonds to German investors when the spot rate is $1.45/ The interest rate is 3 percent
QUESTION S AUS company borrows 100,000,000 by issuing bonds to German investors when the spot rate is $1.45/ The interest rate is 3 percent per annum Which of the following is false conceming the U.S. company's accounting for this loan? A decrease in the S/E will generate an exchange gain on the bonds payable if the spot rate rises to $1.55/E one year hence, when the interest payment is accrued, the interest expense will be recorded at $4,650 000 If the company desires to hedge these bonds, it will have to purchase euros forward d. The bonds payable will be carried at $145.000.000 until they mature
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