Please help with the last one in RED X 2-a. What amounts relating to the loan will appear on AML's statement of financial position on 31 December 20X9? (Do not roundintermediate calculations.)O Answer is complete and correct.Statement of Financial PositionLong-term notepayableAccrued interestpayable$ 21,120,000$ 1,126,4002-b. What amounts are included in earnings for 20X9? (Do not round intermediate calculations.)Answer is complete but not entirely correct.Statement of Comprehensive IncomeInterest expense$ 1,164,800Foreign exchange gain$ (960,000) X On 1 May 20X9, All-Man Imports Ltd. (AML) obtained a five-year loan from a major New York bank. The loan is for US$24,000,000,bears interest at 8% per annum (paid annually on the loan anniversary date), and matures on 31 December 20X14. AML reports inCanadian dollars. At the date the note was issued, the exchange rate was US$1.00 = Cdn$0.92. On 31 December 20X9, the exchangerate was US$1.00 = Cdn$0.88, and the average exchange rate for the last 8 months of the year was US$1.00 = Cdn$0.91.Required:1. Prepare the journal entry to record the loan on 1 May 20X9. (If no entry is required for a transaction/event, select "No journal entryrequired" in the first account field.)Answer is complete and correct.NoTransactionGeneral JournalDebitCredit11Cash22,080,000 OLong-term note payable22,080,000

As per US GAAPs, effect of foreign currency fluctuations on Assets or Liabilities will be recorded…

2-a. What amounts relating to the loan will appear on AML's statement of financial position on 31 December 20X9? (Do not round intermediate calculations.) Answer is complete and correct. Statement of Financial Position Long-term note payable Accrued interest payable $ 21,120,000 $ 1,126,400 2-b. What amounts are included in earnings for 20X9? (Do not round intermediate calculations.) Answer is complete but not entirely correct. Statement of Comprehensive Income Interest expense $ 1,164,800 Foreign exchange gain $ (960,000) X

2-a. What amounts relating to the loan will appear on AML's statement of financial position on 31 December 20X9? (Do not round intermediate calculations.) Answer is complete and correct. Statement of Financial Position Long-term note payable Accrued interest payable $ 21,120,000 $ 1,126,400 2-b. What amounts are included in earnings for 20X9? (Do not round intermediate calculations.) Answer is complete but not entirely correct. Statement of Comprehensive Income Interest expense $ 1,164,800 Foreign exchange gain $ (960,000) X

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter22: International Financial Management

Section: Chapter Questions

Problem 8P

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On April 1, 2017, Mendoza Company borrowed 508,000 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, 2017 and will make a second interest payment on March 31, 2018 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: April 1, 2017 $ 1.10 October 1, 2017 1.20 December 31, 2017 1.24 March 31, 2018 1.28
On October 1, 2017, Sharp Company (based in Denver, Colorado) entered into a forward contract to sell 100,000 rubles in four months (on January 31, 2018) and receive $39,000 in U.S. dollars. Exchange rates for the ruble follow:Sharp’s incremental borrowing rate is 12 percent. The present value factor for one month at an annual interest rate of 12 percent (1 percent per month) is 0.9901. Sharp must close its books and prepare financial statements on December 31.a. Prepare journal entries, assuming that Sharp entered into the forward contract as a fair value hedge of a 100,000 ruble receivable arising from a sale made on October 1, 2017. Include entries for both the sale and the forward contract.b. Prepare journal entries, assuming that Sharp entered into the forward contract as a fair value hedge of a firm commitment related to a 100,000 ruble sale that will be made on January 31, 2018. Include entries for both the firm commitment and the forward contract. The fair value of the firm…
On December 1, 2017, Ringling Company (a U.S.-based company) entered into a three-month forward contract to purchase 1,000,000 pesos on March 1, 2018. The following U.S. dollar per peso exchange rates apply: Date Spot Rate ForwardRate (to March 1, 2018)Dec1, 2017 $0.044 $0.047 Dec 31, 2017 0.046 0.049 March 1, 2018 0.050 N/A Ringling’s incremental borrowing rate is 12 percent. The present value factor for two months at an annual interest rate of 12 percent (1 percent per month) is 0.9803.Which of the following correctly describes the manner in which Ringling Company will report the forward contract on its December 31, 2017, balance sheet? Choose the correct.a. As an asset in the amount of $1,960.60.b. As an asset in the amount of $2,940.90.c. As a liability in the amount of $980.30.d. As a liability in the amount of $2,940.90.