Journal entries of transactions involving the purchase

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On September 15, 20X2, Wall Company, a U.S. firm, purchased a piece of equipment from a foreign firm for 500,000 FCs. Payment for the equipment was to be made in FCs on January 15, 20X3. The spot rates on selected dates were as follows:

Date Spot Rate
9/15/X2 1 FC = $0.30
12/31/X2 1 FC = $0.33
1/15/X3 1 FC = $0.315

Required:

a. Assuming that the US Corp. has a December 31 year end, prepare the necessary journal entries to account for the series of transactions involving the purchase.

Reference no: EM13148793

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