On November 1, 20X3, the Penguin Corporation, a US corporation, purchased an extruding machine from Shearwater Corporation, a UK company. The purchase price was $10,000 and Penguin agreed to pay in pounds on February 1, 20X4. Both corporations are on a calendar year accounting period. Assume that the spot rates for the British pound on November 1, 20X3, December 31, 20X3, and February 1, 20X4, are $1.60, $1.62, and $1.66, respectively. Required: Record the November 1, December 31, and February 1 transactions in the General Journals of Penguin Corporation and Shearwater Corporation. If no entry is required on a particular date, indicate “No entry” in the General Journal.
On November 1, 20X3, the Penguin Corporation, a US corporation, purchased an extruding machine from Shearwater Corporation, a UK company. The purchase price was $10,000 and Penguin agreed to pay in pounds on February 1, 20X4. Both corporations are on a calendar year accounting period. Assume that the spot rates for the British pound on November 1, 20X3, December 31, 20X3, and February 1, 20X4, are $1.60, $1.62, and $1.66, respectively. Required: Record the November 1, December 31, and February 1 transactions in the General Journals of Penguin Corporation and Shearwater Corporation. If no entry is required on a particular date, indicate “No entry” in the General Journal.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On November 1, 20X3, the Penguin Corporation, a US corporation, purchased an
extruding machine from Shearwater Corporation, a UK company. The purchase price
was $10,000 and Penguin agreed to pay in pounds on February 1, 20X4. Both
corporations are on a calendar year accounting period. Assume that the spot rates for
the British pound on November 1, 20X3, December 31, 20X3, and February 1, 20X4,
are $1.60, $1.62, and $1.66, respectively.
Required:
Record the November 1, December 31, and February 1 transactions in the General
Journals of Penguin Corporation and Shearwater Corporation. If no entry is required
on a particular date, indicate “No entry” in the General Journal.
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