On June 3, Kratz Company, a U S company, purchased inventory on credit from a British Company for 40,000 Kratz properly recorded its inventory and accounts payable at $72,800, based on an exchange rate of $1 82 Kratz paid for the inventory on June 24 when the exchange rate was $1 86 Prepare the jou...

On June 3, Kratz Company, a U.S. company, purchased inventory on credit from a British Company for

Question:

On June 3, Kratz Company, a U.S. company, purchased inventory on credit from a British Company for £40,000. Kratz properly recorded its inventory and at $72,800, based on an of $1.82.
Kratz paid for the inventory on June 24 when the was $1.86. Prepare the journal entry of Kratz Company to record the payment.

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...