On Dec 20, a US firm purchased equipment worth $1,000 Euros on account The payment was made on Jan 20 (There is no forward contract taken here) Exchange rates 1 Euro $1 30 20 Dec 1 Euro $1 40 31 Dec 1 Euro $1 45 20 Jan Required What is the journal entry for the transaction on Dec 20 Refer to the qu...

1 The journal entry for the transaction on Dec 20 would be as foll ...

On Dec 20, a US firm purchased equipment worth $1,000 Euros on account. The payment was made

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Question:

On Dec 20, a US firm purchased equipment worth $1,000 Euros on account. The payment was made on Jan 20 (There is no forward contract taken here)

Exchange rates:

1 Euro = $1.30 20-Dec
1 Euro = $1.40 31-Dec
1 Euro = $1.45 20-Jan

Required

What is the journal entry for the transaction on Dec 20?
Refer to the question above. Based on the change in the exchange rate. What gain or loss will be recorded on Dec 31?

Related Book For answer-question

Advanced Accounting

ISBN: 978-0077431808

10th edition

Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik

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Posted Date: May 29, 2023 12:14 AM

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On Dec 20, a US firm purchased equipment worth $1,000 Euros on account. The payment was made

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1 The journal entry for the transaction on Dec 20 would be as foll... View the full answer

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