At the end of the fiscal year December 31 20X2
At the end of the fiscal year, December 31, 20X2, Avonlea Ltd. finds itself with two accounts receivable in pesos:
1. From a sale on July 1, 20X2, and due to be collected on December 1, 20X3, for 1,000,000 pesos.
2. From a sale on September 1, 20X2, and due to be collected on February 1, 20X4, for 2,000,000 pesos.
Exchange rates (spot):
July 1, 20X2.......................... $ 1 = 16 pesos
September 1, 20X2...................... $ 1 = 17 pesos
December 31, 20X2...................... $ 1 = 18 pesos
December 1, 20X3........................ $ 1 = 11 pesos
December 31, 20X3...................... $ 1 = 9 pesos

Required
Prepare the journal entries for December 31, 20X2, and December 1 and December 31, 20X3, assuming that the foreign exchange risk is not hedged.

Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
    Tutors
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
OR
Relevant Tutors available to help