Question: On 1 April 2 0 2 3 , a US based company has purchased lubricants ( chemical ) from a German based company Evonik industries

On $1$ April $2023,$ a US based company has purchased lubricants $($ chemical $)$ from a German based company Evonik industries for EUR $1, 500, 000$ on credit. Keeping in view the spot exchange rate on the date of transaction is $1$ EUR $= 1.11$ USD, please record the journal entry in the books of US company in USD.

On the date $(30$ April $2023)$ of actual payment of amount by the US company to German company the exchange rate has fluctuated as $1$ EUR $= 1.20$ USD. Please record the journal entry in the books of US company in USD. Also, please calculate and record if there is any loss from the foreign currency transaction?

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Journal Entry on April 1 2023 Debit Lubricants Expense Chemicals 1650000 Credit Accounts Payable Evo... View full answer

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