Al-Sultan Company bought equipment from a German company for 30,000 Euros on 3/10/2003, with payment to be
Question:
Al-Sultan Company bought equipment from a German company for 30,000 Euros on 3/10/2003, with payment to be made on 6/8/2003. On 3/10/2003, Al-Sultan Company concluded a purchase contract for 30,000 Euros, so that the exchange takes place after 90 days from the date of the contract. The forward currency exchange contract was concluded at an exchange rate of 1.519 Saudi riyals per mark. Al-Sultan Company entered into a currency deferred exchange contract to cover the risks of its liabilities in euros. The spot exchange rate reached the following prices: On 10/3/2003 1.504 riyals to the euro On 6/8/2003 1.545 riyals to the euro
Required :
Preparing the daily entries necessary to record the purchase of equipment, as well as the entries for registering the deferred currency exchange contract, in addition to the currency settlement entries by paying on the due date.
Expert Answer:
To record the purchase of equipment and the deferred currency exchange contract as well as the curre... View the full answer
