Journal entries for an account receivable denominated in Euros ($US weakens) Ass

Question

Journal entries for an account receivable denominated in Euros ($US weakens)

Assume that your company sells products to a customer located in France on October 15. The invoice specifies that payment is to be made on January 15 in Euros (€) in the amount of €350,000. Your company operates on a calendar year basis.

Assume the following exchange rates:

October 15 $0.90: €1 December 31 $1.05: €1 January 15

$1.10: €1

QUESTION 2 Not changed since last attempt Marked out of 20.00 F Flag question Journal entries for an account receivable denominated in Euros (SUS weakens) Assume that your company sells products to a customer located in France on October 15. The invoice specifies that payment is to be made on January 15 in Euros () in the amount of 350,000. Your company operates on a calendar year basis. Assume the following exchange rates: October 15 s0.90: 1 December 31 $1.05: 1 January 15$1.101 Prepare the journal entries to record the sale (ignore cost of goods sold), the required adjusting entry at December 31, and the receipt of payment january 15 General Journal Date Description Credit Oct 15 Dec 31 Jan 15 Foreign currency transaction gein

Explanation / Answer

General Journal Date Account Title & Explanation Debit Credit Oct-15 Accounts Receivable $315,000.00 Sales ($0.90* Euro350000) $315,000.00 To record the sale at at $0.90/ Euro1 Dec-31 Accounts Receivable $52,500.00 Foreign currency transaction gain ($1.05-$0.90)350000 $52,500.00 To record the increase in the Account Receivable to$1.05 :1 Euro. Jan-15 Cash ($1.10*350000) $385,000.00 Foreign currency transaction gain ($385000-$367500) $17,500.00 Accounts Receivable $367,500.00 To record the payment received

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