Question
In: Accounting
On September 30, 2015, Ericson Company negotiated a 2-year, 1,000,000 dudek loan from a foreign bank...
On September 30, 2015, Ericson Company negotiated a 2-year, 1,000,000 dudek loan from a foreign bank at an interest rate of 2 percent per year. It makes interest payments annually on September 30 and will repay the principal on September 30, 2017. 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, 2015 | $0.100 |
| December 31, 2015 | 0.105 |
| September 30, 2016 | 0.120 |
| December 31, 2016 | 0.125 |
| September 30, 2017 | 0.150 |
b.Determine the effective cost of borrowing in dollars in each of the three years 2015, 2016, and 2017.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
On September 30, 2015, Ericson Company negotiated a 2-year, 1,000,000 dudek loan from a foreign bank...
On September 30, 2015, Ericson Company negotiated a 2-year,
1,000,000 dudek loan from a foreign bank at an interest rate of 2
percent per year. It makes interest payments annually on September
30 and will repay the principal on September 30, 2017. 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, 2015
$0.100
December 31, 2015
0.105
September...
On September 30, 2017, Ericson Company negotiated a two-year, 1,000,000 dudek loan from a foreign bank...
On September 30, 2017, Ericson Company negotiated a two-year, 1,000,000 dudek loan from a foreign bank at an interest rate of 2 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. a. Prepare all journal entries related to this foreign currency borrowing assuming the following exchange rates for 1 dudek: September 30, 2017 $0.100December 31, 2017 0.105September 30, 2018 0.120 December 31, 2018 0.125September 30,...
PLEASE ANSWER STEP 2 ONLY On September 30, 2015, Dolphin Incorporated negotiated a 1,000,000 euro, two-year...
PLEASE ANSWER STEP 2 ONLY
On September 30,
2015, Dolphin Incorporated negotiated a 1,000,000 euro, two-year
loan from a German bank. The annual interest on the loan is 2%.
Dolphin makes annual interest payments on September 30. Dolphin
will repay the loan principal on September 30, 2017. Dolphin
prepares December 31 year-end financial statements in U.S.
dollars.
Step 1:
Prepare the journal entries in Table 1 below for this foreign
currency borrowing, based on the following exchange rates for one...
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10-year 9% bonds sated September 30, for $1,067,950 an effective
(market) rate of 8%. Interest is payable semi-annually on October 1
and April 1. The bonds were purchased by Juan’s Junk and Basura
Inc. Present the entries to record the following transactions for
the current year on BOTH sets of books: (Issuing Corporation and
Investor) a) Issuance of bonds b) Accrual of interest and
amortization for the period ended December 31....
On September 30, Jose’s Jalapenos Inc., issued $1,000,000 of 10-year 9% bonds sated September 30, for...
On September 30, Jose’s Jalapenos Inc., issued $1,000,000 of
10-year 9% bonds sated September 30, for $1,067,950 an effective
(market) rate of 8%. Interest is payable semi-annually on October 1
and April 1. The bonds were purchased by Juan’s Junk and Basura
Inc. Present the entries to record the following transactions for
the current year on BOTH sets of books: (Issuing Corporation and
Investor)
Issuance of bonds
Accrual of interest and amortization for the period ended
December 31. Use the...
On September 30, Jose’s Jalapenos Inc., issued $1,000,000 of 10-year 9% bonds sated September 30, for...
On September 30, Jose’s Jalapenos Inc., issued $1,000,000 of
10-year 9% bonds sated September 30, for $1,067,950 an effective
(market) rate of 8%. Interest is payable semi-annually on October 1
and April 1. The bonds were purchased by Juan’s Junk and Basura
Inc. Present the entries to record the following transactions for
the current year on BOTH sets of books: (Issuing Corporation and
Investor) a) Issuance of bonds b) Accrual of interest and
amortization for the period ended December 31....
(a) Ericson Corporation’s total assets are projected to increase by $30 million next year. Ericson is...
(a) Ericson Corporation’s total assets are projected to increase
by $30 million next year. Ericson is also scheduled to repay $14
million in debt next year. Other than this repayment, no changes in
liabilities are currently scheduled. Ericsons’s income is projected
to be $4 million, half of which will be paid as a dividend. What is
the amount of Ericson’s External Funds Needed (EFN) for next
year?
(b) Ericson’s $4 million net income consists of $33 million in
revenues, less...
On September 30, 2020, Peace Frog International (PFI) (a U.S.-based company) negotiated a two-year, 2,800,000 Chinese...
On September 30, 2020, Peace Frog International (PFI) (a
U.S.-based company) negotiated a two-year, 2,800,000 Chinese yuan
loan from a Chinese bank at an interest rate of 4 percent per year.
The company makes interest payments annually on September 30 and
will repay the principal on September 30, 2022. PFI prepares U.S.
dollar financial statements and has a December 31 year-end.
Relevant exchange rates are as follows:
Date
U.S. Dollar per Chinese Yuan (CNY)
September 30, 2020
$
0.170
December...
A company is trying to obtain a loan at the bank for $1,000,000. What financial and...
A company is trying to obtain a loan at the bank for $1,000,000.
What financial and nonfinancial information do you feel the bank
would like to see regarding their potential client? The company is
in the bio-tech industry and has a promising treatment for a rare
cancer. Please advise in 200 words or more.
B-Good, Inc. has accounts receivable at September 30 of $1,000,000. At September 30, Allowance for Doubtful...
B-Good, Inc. has
accounts receivable at September 30 of $1,000,000. At September 30,
Allowance for Doubtful Accounts has a
credit balance (prior to
adjustment) of
$
2,250
The Company uses the
percentage of receivables basis for estimating uncollectible
accounts. An analysis of the accounts
and the percentage of
estimated bad debts are as follows:
Month of
Age of
9/30
Estimated %
Sale:
Accounts
Balance
Uncollectible
September
1 - 30 days
$650,000
2.5%
August
31 - 60 days
150,000
6.0%
July...
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