Phillips Company provides engineering, design, construction, and maintenance services for construction projects. Phillips main office is located in San Diego, California but they are a global business providing services in Europe, Asia, and parts of South America.

On 9/1/20x1, Phillips purchased $300,000 of inventory from a non-U.S. vendor. In order to get the best price offered, Phillips Company agreed to pay the vendor in the vendors local currency, called the FC. Additionally, to avoid a penalty, Phillips must make payment to its foreign vendor by February 2, 20x2. At the 9/1 spot rate, Phillips must pay their vendor FC 591,000 by the due date. Assume that Phillips Company pays the vendor on 2/2/20x2.

The various FC/$ exchange rates during this period was:

Spot rate (FC = $1):
9/1/20x1	1.97
12/31/20x1	1.95
2/2/20x2	2.00

Phillips Company has a December 31 year-end.

Required:

Assuming the Phillips pays for the inventory purchase on February 2, 20x2, as agreed:

1. Prepare Phillips Companys journal entries relating to the inventory purchase for the following dates:

   1. 9/1/20x1,

   2. 12/31/20x1, and

   3. 2/2/20x2.