Exercise (2):
javier computer services began operations in july 2017. at the end of the month, the company prepares monthly financial statements. it has the following information for the month.
1. at july 31, the company owed employees $1,300 in salaries that the company will pay in august.
2. on july 1, the company borrowed $20,000 from a local bank on a 10-year note. the annual interest rate is 12%.
3. service revenue unrecorded in july totaled $2,400.
required:
prepare the adjusting entries needed at july 31, 2017.

The east asiatic company (eac), a danish company with subsidiaries throughout asia, has been funding its bangkok subsidiary primarily with u.s. dollar debt because of the cost and availability of dollar capital as opposed to thai baht-denominated (b) debt. the treasurer of eac-thailand is considering a 1-year bank loan for $247,000.the current spot rate is b32.03 /$, and the dollar-based interest is 6.78% for the 1-year period. 1-year loans are 12.04% in baht.a. assuming expected inflation rates of 4.3 % and 1.24% in thailand and the united states, respectively, for the coming year, according to purchase power parity, what would the effective cost of funds be in thai baht terms? b. if eac's foreign exchange advisers believe strongly that the thai government wants to push the value of the baht down against the dollar by5% over the coming year (to promote its export competitiveness in dollar markets), what might the effective cost of funds end up being in baht terms? c. if eac could borrow thai baht at 13% per annum, would this be cheaper than either part (a) or part (b) above?