On September 15, 20X2, Wall Company, a U.S. firm, purchased a piece of equipment from a foreign firm for 500,000 FCs. Payment for the equipment was to be made in FCs on January 15, 20X3. The spot rates on selected dates were as follows:
Required:
a.
Assuming that the US Corp. has a December 31 year end, prepare the necessary journal entries to account for the series of transactions involving the purchase.
b.
Prepare all the necessary journal entries assuming that the US Corp. will be paying for the equipment in U.S. dollars.

Question

On September 15, 20X2, Wall Company, a U.S. firm, purchased a piece of equipment from a foreign firm for 500,000 FCs. Payment for the equipment was to be made in FCs on January 15, 20X3. The spot rates on selected dates were as follows:
  Required: 
a.
Assuming that the US Corp. has a December 31 year end, prepare the necessary journal entries to account for the series of transactions involving the purchase.
b.
Prepare all the necessary journal entries assuming that the US Corp. will be paying for the equipment in U.S. dollars.

Quizplus · Accepted Answer

The Answer of On September 15, 20X2, Wall Company, a U.S. firm, purchased a piece of equipment from a foreign firm for 500,000 FCs. Payment for the equipment was to be made in FCs on January 15, 20X3. The spot rates on selected dates were as follows:
  Required: 
a.
Assuming that the US Corp. has a December 31 year end, prepare the necessary journal entries to account for the series of transactions involving the purchase.
b.
Prepare all the necessary journal entries assuming that the US Corp. will be paying for the equipment in U.S. dollars.