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On November 12, Higgins, Inc., a U.S. Company, sold merchandise on credit to Kagome of Japan at a price of 1,700,000 yen. The exchange rate
On November 12, Higgins, Inc., a U.S. Company, sold merchandise on credit to Kagome of Japan at a price of 1,700,000 yen. The exchange rate was $.00857 per yen on the date of sale. On December 31, when Higgins prepared its financial statements, the exchange rate was $.00863. Kagome paid in full on January 12, when the exchange rate was $.00881. On December 31, Higgins should prepare the following journal entry Multiple Chaice Debit Sales $102; credit Foreign Exchange Gain $102. Debit Foreign Exchange Loss $102; Accounts Receivable-Kagome $102. Debit Foreign Exchange Loss $102; credit Sales $102 Debit Accounts Receivable-Kagome $102; credit Foreign Exchange Gein $102 No journal entry is required until the amount is collected
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