Foreign Currency Transactions:

Facts: On December 10, 201x6, World Wide, Inc ( a U.S corporation) Imported merchandise from Canon Company (a company domiciled in Japan). The direct exchange rate for yen on this date was 1=$.0045. World Wide settled the account on Jan. 9, 20x7, when the direct exchange rate was 1= $.0048. World Wide is a calendar year company and uses a perpetual inventory system. The direct exchange rate on December 31, 20x6 was 1=$.0049.

Required: Prepare journal entries on the books of World Wide inc. to record the purchase, adjust the accounts at Dec 31(if necessary) and settlement of the account under the following two alternatives:

1. World Wide was billed $2450 for the merchandise.
2. World Wide was billed 500,000 for the merchandise.