Peerless Corporation (a U.S. company) made a sale to a foreign customer on Septe

Question

Peerless Corporation (a U.S. company) made a sale to a foreign customer on September 15, for 119,000 crowns. It received payment on October 15. The following exchange rates for 1 crown apply: September 15 September 30 October 15 0.61 ?. 65 0.60 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.)

Explanation / Answer

Date General Jornal Debit ($) Credit ($) 09/15 Accounts Receivable (119,000 * $0.61) 72,590 Sales 72,590 (To record sales to foreign customer) 09/30 Accounts Receivable [119,000 * ($0.65 -$0.61)] 4,760 To Forign exchange gain 4,760 (To record the year end foreign exchange gain) 10/15 Forign exchange loss [119,000 * ($0.65 -$0.60)] 5,950 Accounts Receivable 5,950 (To record the foreign exchange loss on date of payment) Cash 71,400 Accounts Receivable [$72,590 + $4,760 - $5,950] 71,400 (To record receipt of payment)

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