Somnolentus Entity is a French food manufacturer. Recently, Ustal Entity, a Russian retailer purchased 20,000 chocolate bars on credit from Somnolentus at a price of €10,000. Ustal paid Somnolentus 30 days later. The spot exchange rate between the euro (used by somnolentus) and the ruble (used by Ustal) at the date of purchase is €1 to RUB10. Thirty days later, on the day that Ustal paid Somnolentus, the spot exchange rate was €1 to RUB5. What are the journal entries for the date of purchase and the date of payment for Ustal?

Question

Quizplus · Accepted Answer

The Answer of Somnolentus Entity is a French food manufacturer. Recently, Ustal Entity, a Russian retailer purchased 20,000 chocolate bars on credit from Somnolentus at a price of €10,000. Ustal paid Somnolentus 30 days later. The spot exchange rate between the euro (used by somnolentus) and the ruble (used by Ustal) at the date of purchase is €1 to RUB10. Thirty days later, on the day that Ustal paid Somnolentus, the spot exchange rate was €1 to RUB5. What are the journal entries for the date of purchase and the date of payment for Ustal?

Somnolentus Entity Is a French Food Manufacturer