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Question
On November 12, Kera, Inc., a U.S. company, sold merchandise on credit to Kakura Company of Japan at a price of 1,500,000 yen. The exchange rate was $0.00837 on the date of sale. On December 31, when Kera prepared its financial statements, the exchange rate was $0.00843. Kakura Company paid in full on January 12, when the exchange rate was $0.00861.
On January 12, Kera should prepare the following journal entry for this transaction:
A.
| Cash................................................................ 12,915 Accounts Receivable Kakura Company.. Foreign Exchange....................................... | 12,555 360 |
B.
| Cash............................................................... Foreign Exchange Loss............................. | 12,555 360 | |
| Accounts Receivable Kakura Company. | 12,915 |
C.
| Cash............................................................... Accounts Receivable Kakura Company. | 12,915 | 12,645 |
| Foreign Exchange Gain............................. | 90 |
D.
| Cash............................................................... 12,645 Foreign Exchange Loss........................ 90 | |
| Accounts Receivable Kakura Company... | 12,915 |
E.
| Cash................................................................. | 12,915 | |
| Foreign Exchange Gain........................... | 270 | |
| Accounts Receivable Kakura Co. | 12,645 |
Answer
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Related questions
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