What is a journal entry and how is it written for finance? Please help record a

Question

What is a journal entry and how is it written for finance? Please help record a journal entry for each of the following transactions:

a. A U.S.-based MNC invests $800 million in a factory located in South Africa and finances the project by issuing bonds in Germany.

b. A Mexican company sells $5 million worth of goods to an Arizona company and deposits the check in a bank in Scottsdale.

c. The Bank of Denmark purchases 1.3 billion dollars in the foreign exchange market to hold down the value of the krone and uses these dollars to buy U.S. Treasury bonds.

d. A U.S.-based MNC pays $9 million in dividends to foreign residents. Those residents decide to hold the dividends in bank deposits in New York.

e. A U.S. car manufacturer exports $110 million of cars to the Philippines and receives payment in the form of a check drawn on a U.S. bank.

Explanation / Answer

A)

Charge Cash $800m

Credit Bonds (in Germany ) $800m

(Bonds issued in Germany)

Charge Factory at South Africa $800m

Credit Cash $800m

(being account the South Africa manufacturing plant)

B)

Charge Cash $5m

Credit Goods Inventory $5m

(being $5m worth of products sold to the Arizona Company)

Charge Bank in Scottsdale $5m

Credit Cash $5m

(being receipt of products sold to the Arizona Company kept in Bank in Scottsdale )

C)

Charge Cash (US Dollars) $1.30b

Credit Capital in krone $1.30b

(being the incentive in krone sold in outside trade to buy 1.30 billion dollors)

Charge US Treasury Bonds $1.30b

Credit Cash (US Dollars) $1.30b

D)

Charge Dividends to outside occupants $9m

Credit Cash $9m

E)

Charge Cash $110m

Credit Sales (Exports to Philippines) $110m

(being autos traded to Philippines and receipt kept in US)

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.