Question

Leigh of New York sells its products to customers in the United States and the United Kingdom. On December 16, 2019, Leigh sold merchandise on credit to Bronson Ltd. of London at a price of 17,000 pounds. The exchange rate on that day for £1 was $1.4583. On December 31, 2019, when Leigh prepared its financial statements, the rate was £1 for $1.4382. Bronson paid its bill in full on January 15, 2020, at which time the exchange rate was £1 for $1.4482. Leigh immediately exchanged the 17,000 pounds for U.S. dollars.

Prepare Leigh’s journal entries on December 16, December 31, and January 15. (Do not round intermediate calculations.)

Answer 1

No.	Date	General journal	Debit	Credit
1	Dec. 16, 2019	Accounts Receivable - Bronson	24791.10
		Sales (17000 pounds * $1.4583)		24791.10
2	Dec. 31, 2019	Foreign exchange loss	341.70
		Accounts receivable – Bronson ((17000 pounds * $1.4583)- (17000 pounds * $1.4382)		341.70
3.	Jan. 15, 2020	Cash (17000*1.4482)	24619.40
		Accounts receivable – Bronson (17000* $1.4382)		24449.40
		Foreign exchange gain (balancing figure)		170