On September 12, 2023, Levis, a U.S. company, purchased goods from a German Company at a price of 50,000 Euros, when the direct exchange rate was 1 Euro = $1.35. The account has not been settled as of December 31, 2023, when the exchange rate was 1 Euro = $1.32. On February 2, 2024 Levis paid off the amount due to German Co. when the exchange rate was 1 Euro = $1.33 The entry required to revalue the foreign currency liability to U.S. $ on December 31, 2023 is O a. Debit Foreign Currency Transaction Loss for $500 and credit Accounts Payable (€) for $500. O b. Debit Accounts Payable (€)for $500 and credit Foreign Currency Transaction gain for $500. O c. Debit Foreign Currency Transaction Loss for $1,500 and credit Accounts Payable (€) for $1,500. O d. Debit Accounts Payable (€) for $1,500 and credit Foreign Currency Transaction gain for $1,500.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On September 12, 2023, Levis, a U.S. company, purchased goods from a German Company at a price of 50,000 Euros, when the direct
exchange rate was 1 Euro = $1.35. The account has not been settled as of December 31, 2023, when the exchange rate was 1 Euro = $1.32.
On February 2, 2024 Levis paid off the amount due to German Co. when the exchange rate was 1 Euro = $1.33 The entry required to revalue
the foreign currency liability to U.S. $ on December 31, 2023 is
O a. Debit Foreign Currency Transaction Loss for $500 and credit Accounts Payable (€) for $500.
O b. Debit Accounts Payable (€)for $500 and credit Foreign Currency Transaction gain for $500.
O c. Debit Foreign Currency Transaction Loss for $1,500 and credit Accounts Payable (€) for $1,500.
O d. Debit Accounts Payable (€) for $1,500 and credit Foreign Currency Transaction gain for $1,500.
Transcribed Image Text:On September 12, 2023, Levis, a U.S. company, purchased goods from a German Company at a price of 50,000 Euros, when the direct exchange rate was 1 Euro = $1.35. The account has not been settled as of December 31, 2023, when the exchange rate was 1 Euro = $1.32. On February 2, 2024 Levis paid off the amount due to German Co. when the exchange rate was 1 Euro = $1.33 The entry required to revalue the foreign currency liability to U.S. $ on December 31, 2023 is O a. Debit Foreign Currency Transaction Loss for $500 and credit Accounts Payable (€) for $500. O b. Debit Accounts Payable (€)for $500 and credit Foreign Currency Transaction gain for $500. O c. Debit Foreign Currency Transaction Loss for $1,500 and credit Accounts Payable (€) for $1,500. O d. Debit Accounts Payable (€) for $1,500 and credit Foreign Currency Transaction gain for $1,500.
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