Arkansana Inc. imports inventory from Costa Rica. Prepare the journal entries for Arkansana to record the following transactions. Include any year-end adjustments.Dec 21Purchased inventory from Rojas Co. for 5,000,000 Costa Rican colon. The exchange rate was $0.002 per colon. The credit terms were n/30.Dec 31The exchange rate was $0.0023 per colon.Jan 20Paid Rojas Co. for the December 21 purchase. The exchange rate was $0.0021 per colon.
What will be an ideal response?
| ? |
| Dec 21 | Merchandise Inventory (5,000,000 colon * $0.002) | 10,000 | ? |
| ? | Accounts Payable | ? | 10,000 |
| Dec 31 | Foreign Exchange Loss | 1,500 | ? |
| ? | Accounts Payable [5,000,000 * ($0.002 - $0.0023)] | ? | 1,500 |
| Jan 20 | Accounts Payable ($10,000 +$1,500) | 11,500 | ? |
| ? | Foreign Exchange Gain | ? | 1,000 |
| ? | Cash (5,000,000 * $0.0021) | ? | 10,500 |
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