On September 3,20X8,Jackson Corporation purchases goods for a U.S.dollar equivalent of $17,000 from a Swiss company.The transaction is denominated in Swiss francs (SFr).The payment is made on October 10.The exchange rates were:
What entry is required to revalue foreign currency payable to U.S.dollar equivalent value on October 10?

Question

Quizplus · Accepted Answer

The revaluation of foreign currency payable to U.S. dollar equivalent value on October 10 requires the use of the exchange rate on that date, which is 1 SFr = $0.9894. Therefore, the correct entry would be to debit the foreign currency payable account for the original value of 17,000 SFr and credit the foreign currency gain or loss account for the difference between the original value and the revalued value of 16,794.18 SFr ($16,596.15). Option A correctly reflects this entry, while the other options use incorrect exchange rates or debit the foreign currency gain or loss account instead of crediting it.

On September 3,20X8,Jackson Corporation Purchases Goods for a U