In its 2024 Income statement, what amount should Mifflin Include as a foreign exchange gain or loss on the note?
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- On July 1, 2017, Mifflin Company borrowed 200,000 euros from a foreign lender evidenced by an interest-bearing note due on July 1, 2018. The note is denominated in euros. The U.S. dollar equivalent of the note principal is as follows: Date AmountJuly 1, 2017 (date borrowed) $225,000December 31, 2017 (Mifflin’s year-end) 220,000 July 1, 2018 (date repaid) 210,000 In its 2018 income statement, what amount should Mifflin include as a foreign exchange gain or loss on the note? Choose the correct.a. $15,000 gainb. $15,000 lossc. $10,000 gaind. $10,000 lossOn July 1, 2017, Mifflin Company borrowed 200,000 euros from a foreign lender evidenced by an interest-bearing note due on July 1, 2018. The note is denominated in euros. The U.S. dollar equivalent of the note principal is as follows:In its 2018 income statement, what amount should Mifflin include as a foreign exchange gain or loss on the note?a. $15,000 gainb. $15,000 lossc. $10,000 gaind. $10,000 lossOn July 1, 2017, Mifflin Company borrowed 200,000 euros from a foreign lender evidenced by an interest-bearing note due on July 1, 2018. The note is denominated in euros. The U.S. dollar equivalent of the note principal is as follows: Date Amount July 1, 2017 (date borrowed) $ 225,000 December 31, 2017 (Mifflin's year-end) 220,000 July 1, 2018 (date repaid) 210,000 In its 2018 income statement, what amount should Mifflin include as a foreign exchange gain or loss on the note?$10,000 gain$10,000 loss$15,000 loss$15,000 gain
- Matthias Corp. had the following foreign currency transactions during 2020: Purchased merchandise from a foreign supplier on January 20 for the U.S. dollar equivalent of $63,200 and paid the invoice on April 20 at the U.S. dollar equivalent of $51,400. On September 1, borrowed the U.S. dollar equivalent of $304,000 evidenced by a note that is payable in the lender's local currency in one year. On December 31, the U.S. dollar equivalent of the principal amount was $326,000. In Matthias’s 2020 income statement, what amount should be included as a net foreign exchange gain or loss? Multiple Choice $10,200 loss $22,000 gain $33,800 loss $11,800 gainOn April 1, 2020, Shannon Company, a U.S. company, borrowed 100,000 euros from a foreign bank by signing an interest-bearing note due April 1, 2021. The dollar value of the loan was as follows: Date April 1, 2020 December 31, Amount $ 97,000 103,000 105,000 How much foreign exchange gain or loss should be included in Shannon's 2021 income statement? 2020 April 1, 2021 How much foreign exchange gain or loss should be included in Shannon's 2021 income statement? Multiple Choice $2,000 loss. $1,000 loss. O $1,000 gain, $8.000 loss. $2,000 gain.On July 1, 2020, Mifflin Company borrowed 200,000 euros from a foreign lender evidenced by an interest-bearing note due on July 1, 2021. The note is denominated in euros. The U.S. dollar equivalent of the note principal is as follows: LO 9-2 LO 9-2 LO 9-2 LO 9-2, 9-3 Problems 1. Which of the following combinations correctly describes the relationship between foreign currency transactions, exchange rate changes, and foreign exchange gains and losses? LO 9-1 Type of Transaction Foreign Currency Foreign Exchange Gain or Loss a. Export sale Appreciates Loss b. Import purchase Appreciates Gain c. Import purchase Depreciates Gain d. Export sale Depreciates Gain Date Amount July 1, 2020 (date borrowed). . . . . . . . . . . . . . . . . . . . . . . . . $225,000 December 31, 2020 (Mifflin’s year-end). . . . . . . . . . . . . . . . 220,000 July 1, 2021 (date repaid). . . . . . . . . . . . . . . . . . . . . . . . . . . . 210,000 In its 2021 income statement, what amount should Mifflin include as a…
- On April 1, 2017, Mendoza Company borrowed 514,000 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 Prepare all journal entries 1 Record the borrowal of the foreign loan. 2 Record the first interest payment on the foreign loan. 3 Record the year-end interest accrual on the foreign loan. 4 Record the year-end adjustment to the foreign loan. 5 Record the second interest payment and foreign exchange loss/gain. 6 Record the repayment of the loan and foreign exchange loss/gain.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 0.120December 31, 2018 0.125September 30, 2019 0.150 b. Taking the exchange rate effect on the cost of borrowing into consideration, determine the effective interest rate in dollars on the loan in each of the three years 2017, 2018, and 2019.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:b. Taking the exchange rate effect on the cost of borrowing into consideration, determine the effective interest rate in dollars on the loan in each of the three years 2017, 2018, and 2019.
- On April 1, 2017, Mendoza Company borrowed 500,000 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: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 1.28Matthias Corp. had the following foreign currency transactions during 2017:• Purchased merchandise from a foreign supplier on January 20 for the U.S. dollar equivalent of $60,000 and paid the invoice on April 20 at the U.S. dollar equivalent of $50,000.• On September 1, borrowed the U.S. dollar equivalent of $300,000 evidenced by a note that is payable in the lender’s local currency in one year. On December 31, the U.S. dollar equivalent of the principal amount was $320,000.In Matthias’s 2017 income statement, what amount should be included as a net foreign exchange gain or loss?a. $10,000 gainb. $10,000 lossc. $20,000 gaind. $30,000 loss