On September 1, 2015, Ramus Company purchased machine parts from Ho Man Tin Company for 6,000,000 Hong Kong dollars to be paid on January 1, 2016 The exchange rate on September 1 is HK$7 7 $1 On the same date, Ramus enters into a forward contract and agrees to purchase HK$6,000,000 on January 1, 20...

2015 Sept 1 Inventory 779221 HK Payable HK600000077 779221 No entry is made to reco ...

On September 1, 2015, Ramus Company purchased machine parts from Ho Man Tin Company for 6,000,000 Hong

Question:

On September 1, 2015, Ramus Company purchased machine parts from Ho Man Tin Company for 6,000,000 Hong Kong dollars to be paid on January 1, 2016. The on September 1 is HK$7.7 = $1. On the same date, Ramus enters into a forward contract and agrees to purchase HK$6,000,000 on January 1, 2016, at the rate of HK$7.7 = $1. Make all journal entries necessary on Ramus' books on three dates-September 1, 2015, December 31,
2015, and January 1, 2016-to record this purchase and the forward contract. On December 31, 2015, and on January 1, 2016, the is HK$8.0 = $1. Ramus uses a perpetual inventory system.
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...