On 5 June 2021, TTY Ltd acquired goods on credit from a supplier in London. The goods will be shipped FOB London on 5 June 2021. The cost of the goods is UK450 000, and the debt remains unpaid on 30 June 2021. On 5 June 2021, the exchange rate was A$1.00 = UK0.45. On 30 June 2021, it is A$1.00 = UK0.42. Hence the value of the Australian dollar has decreased relative to the UK pound. TTY Ltd.'s reporting date is 30 June.

a) Provide the accounting entries necessary for the above purchase transaction for the year ending 30 June 2021.

b) In your own words, provide a rationale for why it is necessary to convert foreign currency for financial reporting