Journalize the following transactions:
Corporation, a Kuwait based company (Functional currency the KWD), had the following transactions with its German subsidiary (Functional currency the euro):
1. January 1, 2020: Purchase of equipment (E1) for 100,000 euros on account. Credit terms: Full payment in 6 months. Interest: 12% per annum.
2. July 1, 2020: Purchase of additional equipment (E2) for 200,000 euros paid by wire transfer
3. December 31, 2020: What would be the amount of depreciation expense in the consolidated financial statement for the Equipment (E1 & E2). Use straight-line, no residual value, useful life 10 years.
Additional information:
Exchange rates for the KWD against the Euro
January 1, 2020: 1KWD = 2.9410 €; July 1, 2020: 1KWD = 2.8000 €;
June 30, 2020: 1KWD = 2.8571 €; December 31, 2020: 1KWD = 2.9000 €

Answer rating: 100% (QA)

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