A U.S. company, G. Marx Co., purchases and receives video games from a Japanese company, Saki Corporation,
Question:
A U.S. company, G. Marx Co., purchases and receives video games from a Japanese company, Saki Corporation, on October 20, Year 7. The transaction is denominated in yen and calls for Marx to pay Saki 2 million yen on January 15, Year 8. The spot rate for yen is $.01015 at the time of the transaction. The spot rate is $.01005 on October 31, Year 7, Marx's fiscal year end, and $.01030 on January 15, Year 8.
G. Marx Co. has two wholly owned subsidiaries, H. Marx of Canada and C. Marx of France. Functional currencies are the Canadian dollar for H. Marx and the euro for C. Marx. However, C. Marx keeps its books in a currency that is not the functional currency or the reporting currency.
G. Marx also recently disposed of a long-term investment in Z. Marx of Mexico, a consolidated entity whose functional currency was the peso.
Enter the appropriate amounts for the following journal entries recorded by Marx Corporation for its transaction with Saki Corporation.
To prepare each required journal entry:
Enter the corresponding debit or credit amount in the associated column.
Round all amounts to the nearest whole number.
Not all rows in the table might be needed to complete each journal entry.
If no journal entry is needed, check the “No entry required” box at the top of the table as your response.
1. Record the journal entries for 10/20/Year 7, if any.
No Entry Required
| Account Name | Debit | Credit |
| Inventory | | |
| Accounts payable (yen) | | |
2. Record the journal entries for 10/31/Year 7, if any.
No Entry Required
| Account Name | Debit | Credit |
| Accounts payable (yen) | | |
| Transaction gain | | |
3. Record the journal entries for 1/15/Year 8, if any.
No Entry Required
| Account Name | Debit | Credit |
| Accounts payable (yen) | | |
| Transaction loss | | |
| Cash | | |
Expert Answer:
