On April 1 202O, P Inc., a Canadian public company, issues £1,250,000 in long-term debt to lenders in the Uk. The debt pays interest at an annual rate of 12%,with payments due on March 31 of each year. The debt matures on March 31,2025. P closes its books on December 31 and prepares its financial statementsin Canadian dollars. As a consequence, all amounts relating to this debt mustbe translated. Relevant exchange rates are as follows:1 CdnApril 1, 2020=£ .5741December 31, 2020Cdn =£ .574411 CdnApril 1, 2021=£ .66461 CdnJuly 1, 2021=£ .65051 CdnOctober 1, 2021=£ .7050December 31, 2021Cdn =£ .69511В.Determine the Interest Expense relating to the long-term debt thatwill be reported in P' Income Statement for the year ending December 31,2020 would be.C.How much foreign Exchange Gain (Loss) on the long-term debtthat would be reported in P Income Statement for the year endingDecember 31, 2021.

In financial statments, interest expense is always charged in books of accounts at closing value or…

Answered: В. Determine the Interest Expense relat…

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter9: Taxation Of International Transactions

Section: Chapter Questions

Problem 28P

See similar textbooks

Similar questions

On May 8, 2019, Jett Company (a U.S. company) made a credit sale to Lopez (a Mexican company). The terms of the sale required Lopez to pay 800,000 pesos on February 10, 2020. Jett prepares quarterly financial statements on March 31, June 30, September 30, and December 31. The exchange rates for pesos during the time the receivable is outstanding follow. Compute the foreign exchange gain or loss that Jett should report on each of its quarterly income statements for the last three quarters of 2019 and the first quarter of 2020. Also compute the amount reported on Jett’s balance sheets at the end of each of its last three quarters of 2019. May 8, 2019 . $0.1323 June 30, 2019 . 0.1352 September 30, 2019 . 0.1368 December 31, 2019 0.1335 February 10, 2020 . 0.1386
On 1 March 2020Holmes Ltd enters into a binding agreement with a New Zealand company, which requires the New Zealand Company to construct an item of machinery for Holmes Ltd. The cost of the machinery is NZ$750,000. The machinery is completed on 1 June 2021and shipped FOB Auckland on that date. The debt is unpaid at 30 June 2020, which is also Holmes Ltd’s reporting date.The exchange rates at the relevant dates are: 1 March 2020A$1.00 = NZ$1.20 1 June 2020A$1.00 = NZ$1.30 30 June 2020A$1.00 = NZ$1.25 Required: a) Prepare the journal entries for the above dates, up to 1 June 2021,showing the amount of exchange gain or loss.
South Korea Corp.'s accounts payable at December 31, 2020, totaled P650,000 before any necessary year-end adjustments relating to the following transactions:- On December 27, 2020, South Korea wrote and recorded checks to creditors totaling P350,000 causing an overdraft of P100,000 in South Korea's bank account at December 31, 2020. The checks were mailed out on January 10, 2021.- On December 28, 2020, South Korea purchased and received goods for P150,000, terms 2/10, n/30. South Korea records purchases at net. The invoice was recorded and paid January 3, 2021.- Goods shipped F.O.B. destination on December 20, 2020 from a vendor to South Korea were received January 2, 2020. The invoice cost was P65,000.At December 31, 2020, what amount should South Korea report as total accounts payable?

Recommended textbooks for you

SWFT Corp Partner Estates Trusts

Accounting

ISBN:

9780357161548

Author:

Raabe

Publisher:

Cengage

SWFT Corp Partner Estates Trusts

Accounting

ISBN:

9780357161548

Author:

Raabe

Publisher:

Cengage

SEE MORE TEXTBOOKS

В. Determine the Interest Expense relat will be reported in P' Income Statement for 2020 would be. How much foreign Exchange Gain (l that would be reported in P Income Statem С. 21 2021