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The Isle of Palms Company (IOP), a U.S.-based entity, has a wholly owned subsidiary in Israel that has been determined as having the Israeli shekel (ILS) as its functional currency. On October 1, 2019, the Israeli subsidiary borrowed 500,000 Swiss francs (CHF) from a bank in Geneva for two years at an interest rate of 5 percent per year. The note payable and accrued interest are payable at the date of maturity. On December 31, 2020, the Israeli subsidiary has the following foreign currency balances on its books: Interest expense Interest payable Note payable CHE CHF CHF 25,000 31,250 500,000 Relevant exchange rates between the Israeli shekel (ILS) and Swiss franc (CHF), and between the U.S. dollar (USD) and Israeli shekel (ILS) follow: October 1, 2019 January 1, 2020 Average for 2020 December 31, 2020 ILS per CHF 3.86 3.91 3.95 4.02 USD per ILS 0.30 0.29 0.27 0.25 a. Determine the Israeli shekel amounts at which the Swiss franc balances should be reported on the Israel subsidiary's December 31, 2020, trial balance. b. Determine the U.S. dollar amounts at which the Swiss franc balances should be included in IOP's 2020 consolidated financial statements. (Round your final answers to 2 decimal places.) a. December 31, 2020 Exchange Rate ILS CHE 25,000 31,250 500,000 ILS X = Interest expense Interest payable Note payable b. December 31, 2020 Interest expense Interest payable Note payable Exchange Rate USD X X =

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