Question

Peerless Corporation (a U.S. company) made a sale to a foreign customer on September 15, for 112,000 crowns. It received payment on October 15. The following exchange rates for 1 crown apply:

September 15	$	0.60
September 30		0.66
October 15		0.61

Prepare all journal entries for Peerless in connection with this sale, assuming that the company closes its books on September 30 to prepare interim financial statements. (If no entry is required for a transaction/event, select " No journal entry required" in the first account field.)

a. Record the entry for sales on credit on 9/15

b. record the entry for changes in the exchange rate on 9/30

c.record the entry for changes in the exchange rate on 10/15

d. record the entry for receipt of payment on 10/15

Answer 1

No.	Date	Particulars	Debit	Credit
1	Sep-15	Account Receivable	67200
		Sales		67200
		(112000 Crown * $ 0.60)
2	Sep-30	Account Receivable	6720
		Foreign exchange gain		6720
		(112000 Crown * ($ 0.66- $ 0.61)0
3	Oct-15	Foreign exchange loss	5600
		Account Receivable		5600
		(112000 crown* $ .61- $0.66)
4	Oct-15	Bank	68320
		Account Receivable		68320
		(Received 112000 crown@ $0.61)