Assume that your company purchases inventories from a Mexican supplier on December 15. The invoice specifies that payment is to be made on March 15 in Mexican Pesos in an amount of 150,000 Pesos. Assume the following exchange rates and dates:

December 15..$0.04:1 Peso

December 31..$0.05:1 Peso

March 15..$0.06:1 Peso

Illustrate the following:

• The journal entry by your company on December 15, the adjusting entry on December 31, and the payment entry on March 15.
• Note an explanation of the transaction after each journal entry.
• Describe the rationale for each entry, utilizing GAAP standards when possible.
• 

150,000 Pesos to be paid by your company on March 15 . Exchange Rates: December 15 \$0.040:1 Peso December 31$0.050:1 Peso March 15$0.060:1 Peso Date DrCr 15-Dec 31-Dec 15-Mar 150,000 Pesos to be paid by your company on March 15 . Exchange Rates: December 15 \$0.040:1 Peso December 31$0.050:1 Peso March 15$0.060:1 Peso Date DrCr 15-Dec 31-Dec 15-Mar