On October 31,2010,Darling Company Negotiated a Two-Year 100,000 Franc Loan

Essay

On October 31,2010,Darling Company negotiated a two-year 100,000 franc loan from a foreign bank at an interest rate of 3 percent per year.Interest payments are made annually on October 31,and the principal will be repaid on October 31,2012.Darling 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:
$\begin{array} { | l | c | } \hline & \text { Franc Rate } \\\hline \text { October 31, 2010 } & \$ 0.50 \\\hline \text { December 31, 2010 } & \$ 0.52 \\\hline \text { October 31, 2011 } & \$ 0.60 \\\hline \text { December 31, 2011 } & \$ 0.62 \\\hline \text { October 31, 2012 } & \$ 0.75 \\\hline\end{array}$