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$24,000,000, 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$0.92. On 31 December 20X9, the exchange rate was US$1.00 = Cdn$0.88, and the average exchange rate for the last 8 months of the year was US$1.00 = Cdn$0.91. 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$24,000,000, 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$0.92. On 31 December 20X9, the exchange rate was US$1.00 = Cdn$0.88, and the average exchange rate for the last 8 months of the year was US$1.00 = Cdn$0.91. 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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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