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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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D1.
Account
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.)
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
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