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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$20,000,000, bears interest at 8% per annum (paid annually on the loan anniversary date), and matures on 31 December 20X14. AML reports in Canadian dollars. At the date the note was issued, the exchange rate was US$1.00=Cdn$0.94. On 31 December 20X9, the exchange rate was US$1.00=Cdn$0.90, and the average exchange rate for the last 8 months of the year was US$1.00 = Cdn$0.93. 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 entry required" in the first account field.)

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$20,000,000, bears interest at 8% per annum (paid annually on the loan anniversary date), and matures on 31 December 20X14. AML reports in Canadian dollars. At the date the note was issued, the exchange rate was US$1.00=Cdn$0.94. On 31 December 20X9, the exchange rate was US$1.00=Cdn$0.90, and the average exchange rate for the last 8 months of the year was US$1.00 = Cdn$0.93. 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 entry required" in the first account field.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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es 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$20,000,000, bears interest at 8% per annum (paid annually on the loan anniversary date), and matures on 31 December 20X14. AML reports in Canadian dollars. At the date the note was issued, the exchange rate was US$1.00 = Cdn$0.94. On 31 December 20X9, the exchange rate was US$1.00 = Cdn$0.90, and the average exchange rate for the last 8 months of the year was US$1.00 = Cdn$0.93. 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 entry required" in the first account field.)
Transcribed Image Text:es 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$20,000,000, bears interest at 8% per annum (paid annually on the loan anniversary date), and matures on 31 December 20X14. AML reports in Canadian dollars. At the date the note was issued, the exchange rate was US$1.00 = Cdn$0.94. On 31 December 20X9, the exchange rate was US$1.00 = Cdn$0.90, and the average exchange rate for the last 8 months of the year was US$1.00 = Cdn$0.93. 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 entry required" in the first account field.)
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.) Statement of Financial Position Long-term note payable $ 18,000,000 Accrued interest payable 2-b. What amounts are included in earnings for 20X9? (Do not round intermediate calculations.) Statement of Comprehensive Income Interest expense Foreign exchange gain pe here to search Prev 1 of 2 Check my we HI Next > ee
Transcribed Image Text: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.) Statement of Financial Position Long-term note payable $ 18,000,000 Accrued interest payable 2-b. What amounts are included in earnings for 20X9? (Do not round intermediate calculations.) Statement of Comprehensive Income Interest expense Foreign exchange gain pe here to search Prev 1 of 2 Check my we HI Next > ee
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