On September 30, 2020, Peace Frog International (PFI) (a U. S.-based company) negotiated a two-year, 2,400,000 Chinese yuan loan from a Chinese bank at an interest rate of 4 percent per year. The company makes interest payments annually on September 30 and will repay the principal on September 30, 2022. PFI prepares U. S. dollar financial statements and has a December 31 year-end. Relevant exchange rates are as follows: DateU. S. Dollar per Chinese Yuan (CNY)
September 30, 2020$0.170
December 31, 2020 0.175
September 30, 2021 0.190
December 31, 2021 0.195
September 30, 2022 0.220
a. Prepare all journal entries related to this foreign currency borrowing.
b. Taking the exchange rate effect on the cost of borrowing into consideration, determine the effective interest rate in U. S. dollars on the loan in each of the three years 2020, 2021, and 2022.

Special order carson manufacturing, inc., sells a single product for $36 per unit. at an operating level of 8,000 units, variable costs are $18 per unit and fixed costs $10 per unit. carson has been offered a price of $20 per unit on a special order of 2,000 units by big mart discount stores, which would use its own brand name on the item. if carson accepts the order, material cost will be $3 less per unit than for regular production. however, special stamping equipment costing $4,000 would be needed to process the order; the equipment would then be discarded. assuming that volume remains within the relevant range, prepare an analysis of differential revenue and costs to determine whether carson should accept the special order. use a negative sign with answer to only indicate an income loss from special order; otherwise do not use negative signs with your answers.