Question
In: Accounting
On April 1, 2020, Mendoza Company (a U.S.-based company) borrowed 504,000 euros for one year at...
On April 1, 2020, Mendoza Company (a U.S.-based company) borrowed 504,000 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:
| Date | U.S. Dollar per Euro | ||
| April 1, 2020 | $ | 1.16 | |
| October 1, 2020 | 1.26 | ||
| December 31, 2020 | 1.30 | ||
| March 31, 2021 | 1.34 | ||
Solutions
ekkarill92 answered 2 years agoRelated Solutions
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Term of loan is 3 years
Interest payment dates - July 1 and January 1 of
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10%
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