Record a journal entry for each of the following transactions: A) A U.S.-based M

Question

Record a journal entry for each of the following transactions:

A) A U.S.-based MNC invests $800 million in a factory located in South Africa and finances the project by issuing bonds in Germany.

B) A Mexican company sells $5 million worth of goods to an Arizona company and deposits the check in a bank in Scottsdale.

C) The Bank of Denmark purchases 1.3 billion dollars in the foreign exchange market to hold down the value of the krone and uses these dollars to buy U.S. Treasury bonds.

D) A U.S.-based MNC pays $9 million in dividends to foreign residents. Those residents decide to hold the dividends in bank deposits in New York.

E) A U.S. car manufacturer exports $110 million of cars to the Philippines and receives payment in the form of a check drawn on a U.S. bank.

Explanation / Answer

1- cash debit   800 million

    credit capital           800 million

2-bank debit   5 million

credit sales          5 million

3-investment in money market securities debit   1.3 billion

   credit cash                                                                                1.3 billion

4-dividend payable debit

    credit bank or cash

5-bank debit   110million

   credit sales                       110 million

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