Assume that Millan agrees to purchase US$100,000 for C$84,745 on January 15,2018.The exchange rate at year-end is US$1 = C$1.20 and the January 15,2018 exchange rate is US$1 = C$1.19.What journal entry is required at year-end?
A) $701 loss.
B) $701 gain.
C) $1,412 loss.
D) $1,412 gain.

Question

Quizplus · Accepted Answer

C)
At purchase: 84,745
At year-end: 100 / 1.20 = 83,333
Change is 84,745 - 83,333= 1,412 loss

Assume That Millan Agrees to Purchase US$100,000 for C$84,745 on January