On April 1, 2020, Mendoza Company (a U. S.-based company) borrowed 518,000 euros for one year at an interest rate of 5 percent per annum. Mendoza must make its first interest payment on the loan on October 1, 2020, and will make a second interest payment on March 31, 2021, when the loan is repaid. Mendoza 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 exchange rates for 1 euro: April 1, 2020 $1.10
October 1, 2020 1.20
December 31, 2020 1.24
March 31, 2021 1.28

                       Journal entries

April 1 2020

Cash Account Dr. (518,000 Euros at 1.10) $569,800

       Short term loan payable Cr               $569,800

Oct 1 2020

Interest expense Account Dr.  $15,540

     Cash Account (518,000*5%*6/12*1.20)  $15,540

Dec 31 2020

Interest expense Account Dr. $8,029

   Interest expense Payable (518,000*5%*3/12*1.24) $8,029

Dec 31 2020

Foreign Exchange Loss Dr. (518,000*0.14) $72,520

    Short Term loan payable Cr. $72,520

Mar 31 2021

Interest expense Account Dr.(518,000*5%*3/12*1.28)  $8,288

Interest expense Payable Account Dr. $8,029

Foreign exchange loss Dr.  $259

      Cash account Cr. (518,000*5%*6/12*1.28) $16,576

Mar 31 2021

Short term loan payable Account Dr. $683,760

Foreign Exchange loss Dr. (518,000*0.04) $20,720

      Cash account Cr. (518,000*1.28) $663,040