ABC Inc. borrowed funds from its bank. Details are as follows.
Four year term loan, U.S. $500,000
Funds borrowed 1 January 2016; due 31 December 2019
Exchange rates:
|
1 January 2016 |
U.S. $1 = Cdn. $1.34 |
|
31 December 2016 |
U.S. $1 = Cdn. $1.40 |
|
31 December 2017 |
U.S. $1 = Cdn. $1.41 |
|
31 December 2018 |
U.S. $1 = Cdn. $.136 |
|
31 December 2019 |
U.S. $1 = Cdn. $1.38 |
Required:
Prepare the journal entries as follows to record:
(A) Receipt of loan proceeds for January 2016.
(B) The adjustment to spot rate for December 2016.
(C) The adjustment to spot rate December 2017
(D) The adjustment to spot rate December 2018
(E) The adjustment to spot rate December 2019
(F) Repayment of loan December 2019
(G )Based on the above information calculate the total accounting recognition of loss.
