70.2K

Verified Solution

Link Copied!

st On August 31 2016, Max Company negotiated a 2-year 200.000 Thai baht (B) loan from a foreign bank at an interest rate of 4% per year. Interest payments are made annually on August 31 (2017 and 2018), and the principal will be repaid on August 31st, 2018. Max Company prepares US dollar financial statements on December 31st of each year. Prepare all journal entries (P7) related to this foreign borrowing assuming the following exchange rates: Date Exchange Rate 8/31/16 B 1 = $0.33 12/31/16 B 1 = $0.37 8/31/17 B 1 = $0.30 12/31/17 B 1 = $0.40 8/31/18 B 1 = $0.42 For the following accounts, write the appropriate exchange rate (listed below) that would be used to report each of these accounts in USD using the current or temporal method. Assume year end is 12/31/17 and assume that all revenues and expenses were incurred evenly through the year. Cash is done as an example. Assume inventory consist of only items purchased in the 4 Quarter of 2017 Date Exchange Rate 1/1/16 $0.27 4/1/16 $0.23 12/31/16 $0.30 $0.25 Average for 2016 1/1/17 $0.28 $0.32 8/1/17 11/15/17 $0.41 $0.40 $0.29 $0.27 12/31/17 Average for 2017 Q1 Average 2017 Q2 Average 2017 Q3 Average 2017 Q4 Average 2017 $0.25 $0.30 $0.34 st On August 31 2016, Max Company negotiated a 2-year 200.000 Thai baht (B) loan from a foreign bank at an interest rate of 4% per year. Interest payments are made annually on August 31 (2017 and 2018), and the principal will be repaid on August 31st, 2018. Max Company prepares US dollar financial statements on December 31st of each year. Prepare all journal entries (P7) related to this foreign borrowing assuming the following exchange rates: Date Exchange Rate 8/31/16 B 1 = $0.33 12/31/16 B 1 = $0.37 8/31/17 B 1 = $0.30 12/31/17 B 1 = $0.40 8/31/18 B 1 = $0.42 For the following accounts, write the appropriate exchange rate (listed below) that would be used to report each of these accounts in USD using the current or temporal method. Assume year end is 12/31/17 and assume that all revenues and expenses were incurred evenly through the year. Cash is done as an example. Assume inventory consist of only items purchased in the 4 Quarter of 2017 Date Exchange Rate 1/1/16 $0.27 4/1/16 $0.23 12/31/16 $0.30 $0.25 Average for 2016 1/1/17 $0.28 $0.32 8/1/17 11/15/17 $0.41 $0.40 $0.29 $0.27 12/31/17 Average for 2017 Q1 Average 2017 Q2 Average 2017 Q3 Average 2017 Q4 Average 2017 $0.25 $0.30 $0.34

Answer & Explanation Solved by verified expert

See Answer