Gemella Ltd. manufactures construction equipment for sale throughout Eastern Canada and the Northeastern United States. Its year-end is June 30. The following foreign currency transactions occurred during the Year 1 calendar year:

1. On January 10, Gemella agreed to sell equipment to an American customer for US$260,000 for delivery on or before March 31 and received a deposit of US$26,000. The balance is payable on July 31.
2. On March 17, the equipment was delivered to the American customer.
3. On May 1, Gemella purchased 100 acres of land in Syracuse, New York, for US$360,000 as a long-term investment. Fifty percent of the purchase price was paid on May 1. The balance is due on May 1, Year 2, along with interest at the rate of 6%.
4. On June 30, the 100 acres of land had a market value of US$230,000. Gemella reports its long-term investments in land at historical cost and discloses the market value of the land in the notes to its financial statements.
5. On July 31, the balance owing was received from the American customer.

The following spot rates exist during the period January to July, Year 1:

	Spot Rates
January 10, Year 1	US$1 = C$1.65
March 17, Year 1	US$1 = C$1.66
May 1, Year 1	US$1 = C$1.68
June 30, Year 1	US$1 = C$1.72
July 31, Year 1	US$1 = C$1.74

Exchange rates changed evenly between the dates indicated above.

Required:

(a) Prepare the journal entries for the transactions stated above including year-end adjusting entries. (Round your answers to 2 decimal places.)

Date	General Journal	Debit	Credit
January 10, Year 1	(Click to select) Accounts receivable Inventory Purchase Exchange gains and losses Notes receivable Receivable from bank Cash Land Equipment
	(Click to select) Bills payable Accounts payable Notes payable Exchange gain Payable to bank Sales Deferred revenue Loan payable Interest receivable
	Record receipt of deposit.
March 17, Year 1	(Click to select) Purchase Cash Accounts receivable Notes receivable Inventory Receivable from bank Equipment Land
	(Click to select) Notes payable Exchange gain Bills payable Interest receivable Payable to bank Loan payable Deferred revenue Sales Accounts payable
	(Click to select) Notes payable Exchange gain Accounts payable Payable to bank Sales Interest receivable Deferred revenue Loan payable Bills payable
	Record the sales.
May 1, Year 1	(Click to select) Receivable from bank Land Exchange loss Equipment Inventory Purchase Notes receivable Accounts receivable
	(Click to select) Bonds Exchange gain Loan payable Cash Sales Interest receivable Notes payable Bills payable
	(Click to select) Notes payable Sales Bills payable Accounts payable Loan payable Interest receivable Deferred revenue Exchange gain Payable to bank
	Record the purchase of land.
June 30, Year 1	(Click to select) Land Accounts receivable Inventory Purchase Receivable from bank Notes receivable Equipment Exchange loss
	(Click to select) Sales Exchange gain Loan payable Interest receivable Payable to bank Accounts payable Notes payable Bills payable
	Record the exchange gain.
	(Click to select) Land Purchase Notes receivable Receivable from bank Accounts receivable Equipment Inventory Accounts payable Exchange loss
	(Click to select) Bills payable Sales Notes payable Accounts payable Interest receivable Payable to bank Exchange gains and losses Loan payable
	Record the exchange gain or loss on purchase of land.
	(Click to select) Inventory Accounts receivable Notes receivable Receivable from bank Land Purchase Equipment Interest expense
	(Click to select) Land Notes receivable Accounts receivable Cash Inventory Purchase Equipment Exchange loss Receivable from bank
	(Click to select) Forward contract Interest payable Loan payable Exchange gain Notes payable Sales Interest receivable Bills payable Accounts payable
	Record the interest expense.
July 31, Year 1	(Click to select) Exchange gains and losses Receivable from bank Purchase Notes receivable Inventory Equipment Accounts receivable Land
	(Click to select) Interest receivable Exchange gain Loan payable Bills payable Notes payable Notes receivable Accounts receivable Accounts payable
	Record the exchange gain.
	(Click to select) Accounts payable Equipment Cash Accounts receivable Inventory Land Notes receivable Purchase Receivable from bank
	(Click to select) Accounts receivable Notes payable Sales Loan payable Cash Exchange gain Interest receivable Bills payable Accounts payable
	Record the receipt of cash.

(b) What value will be disclosed in the notes to the year-end financial statements pertaining to the land purchased in Syracuse? (Omit $ sign in your response.)

Answer rating: 100% (QA)

a Journal Entries Date General Journal Debit Credit January 10 Year 1 Cash 4290000 Defe... View the full answer