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b) Hamilton Corporation (HC) manufactures building equipment and sale throughout Canada and USA. Its year-end is June 30. The following foreign currency transactions occurred during
b) Hamilton Corporation (HC) manufactures building equipment and sale throughout Canada and USA. Its year-end is June 30. The following foreign currency transactions occurred during the Year 1 calender year:
- On January 10, Hamilton agreed to sell equipment to an American customer for US$200,000 for delivery on or before March 31 and received a deposit of US$100,000. The balance is payable on July 31.
- On March 17, the equipment was delivered to the American customer.
- On May 1, Hamilton purchased 100 acres of land in New York, for US$400,000 as a long-term investment. Fifty percent of the purchase price was paid on May 1, Year 2, along with interest at the rate 6%.
- On June 30, the 100 acres of land had a market value of US$610,000. Hamilton reports its long-term investments in land at historical cost and discloses the market value of the land in the notes to its financial statements.
- On July 31, the balance owing was received from the American customer. The following spot rates exist during the period January to July, Year 1:
January 10, Year 1 US$1 = C$1.16
March 17, Year 1 US$1 = C$1.17
May 1, Year 1 US$1 = C$1.19
June 30, Year 1 US$1 = C$1.23
July 31, Year 1 US$1 = C$1.25
Exchange rates changed evenly between the dates indicated above.
Required
Prepare journal entries for the transactions stated above including year-end adjusting entries
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