IAS 21

Hi, please help me understand entries for this task:

An entity, Waiter, has a reporting date of 31 December and the dollar ($) as its functional currency. Waiter borrows in the foreign currency of the Kram (K). The loan of K120,000 was taken out on 1 January 20X7. A repayment of K40,000 was made on 1 March 20X7.
Exchange rates were as follows:
1 January 20X7 – K1: $2
1 March 20X7 – K1: $3
31 December 20X7 – K1: $3.5
Required:
Describe how the above should be accounted for in the financial statements of Waiter for the year ended 31 December 20X7.

Solution:
On 1 January 20X7:
The transaction is recorded at $240,000 (K120,000 × 2).
Dr Cash $240,000
Cr Loans $240,000

On 1 March 20X7:
The cash settlement is recorded at $120,000 (K40,000 × 3).
Dr Loans $120,000
Cr Cash $120,000

Translation at the reporting day:
Dr Profit or loss $160,000
Cr Loans $160,000

I understand why $160,000, but I can’t understand what happens with Cash?
We increase Liabilities end decrease Retained Earnings by $160,000, so Liabilities + Retained Earnings in total are not changed, right?
But don’t we also have to retranslate Cash that we received from the loan by $160,000?
What shall be the entries for K80,000 cash that we still have on balance?
Thank you for your help.