On 1 October 2015, Mirvac Ltd acquires goods on credit from a US supplier. The cost of the goods is US$400,000 and this amount remains unpaid at 31 December 2015 at the time of year end accounts closing. The amount was paid at 20 January 2016.

On 1 October 2015, the exchange rate is A$1.00 = US$ 0.71. 

On 31 December 2015, the exchange rate is A$1.00 = US$ 0.73.

On 20 January 2016, the exchange rate is A$1.00 = US$0.70

Required:

(i)   Determine the amount of the debt in AUD, as at:

·      1 October 2015 and

·      31 December 2015.

·      20 January    2016                                                                           

(ii) Prepare the journal entries for the above dates showing the amount of exchange gain or loss. 

Answer rating: 100% (QA)

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