Question
On November 12, Kera, Inc., a U.S. Company, sold merchandise on credit to Kakura of Japan at a price of 1,500,000 yen. The exchange rate
On November 12, Kera, Inc., a U.S. Company, sold merchandise on credit to Kakura of Japan at a price of 1,500,000 yen. The exchange rate was $0.00837 on the date of sale. On December 31, when Kera prepared its financial statements, the exchange rate was $0.00843. Kakura paid in full on January 12, when the exchange rate was $0.00861. On January 12, Kera should prepare the following journal entry:
A. Debit Cash $12,915; credit Accounts Receivable-Kakura $12,555; credit Foreign Exchange Gain $360. B. Debit Cash $12,555; debit Foreign Exchange Loss $360; credit Accounts Receivable-Kakura $12,915. C. Debit Cash $12,915; credit Accounts Receivable-Kakura $12,645; credit Foreign Exchange Gain $90. D. Debit Cash $12,645; debit Foreign Exchange Loss $90; credit Accounts Receivable-Kakura $12,915. E. Debit Cash $12,915; credit Accounts Receivable-Kakura $12,645; credit Foreign Exchange Gain $270. |
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