2)On December 1, 20X1, Rone Imports, a U.S. company, purchased clocks from Switzerland for 15,000 francs (SFr) to be paid on January 15, 20X2. Rone’s fiscal year ends on December 31, and its reporting currency is the U.S. dollar. The exchange rates areDecember 1, 20X11 SFr = $0.70December 31, 20X11 SFr = 0.66January 15, 20X21 SFr = 0.68b. Prepare journal entries for Rone to record the purchase, the adjustment on December 31, and the settlement. 1Record the purchase of the clocks. 2Record the revaluation of the foreign currency payable to the U.S. dollar equivalent value. 3Record the revaluation of accounts payable to the current U.S. dollar equivalent. 4Record the purchase of Swiss francs. 5Record the settlement of the payables. Required ARequired BPrepare journal entries for Rone to record the purchase, the adjustment on December 31, and the settlement.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.NoDateGeneral Journal1December 1, 20X1 Inventory (or Purchases)Accounts payable (SFr)DebitCredit10,50010,5002December 31, 20X Accounts payable (SFr)600Foreign currency transaction gain6003January 15, 20X2 Accounts payable (SFr)4CashJanuary 15, 20X2 Foreign currency transaction gainAccounts payable (SFr)5January 15, 20X2 Inventory (or Purchases)Accounts payable (SFr)< Required ARequired B >10,20010,20030030010,50010,500

To prepare these journal entries, I followed a systematic approach based on foreign currency…

Answered: Required A Required B Prepare journal…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 44E: Perpetual and Periodic Inventory Systems Below is a list of inventory systems options. a. Perpetual...

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Question

On December 1, 20X1, Rone Imports, a U.S. company, purchased clocks from Switzerland for 15,000 francs (SFr) to be paid on January 15, 20X2. Rone’s fiscal year ends on December 31, and its reporting currency is the U.S. dollar. The exchange rates are

December 1, 20X1	1 SFr = $0.70
December 31, 20X1	1 SFr = 0.66
January 15, 20X2	1 SFr = 0.68

b. Prepare journal entries for Rone to record the purchase, the adjustment on December 31, and the settlement.

1

Record the purchase of the clocks.
2

Record the revaluation of the foreign currency payable to the U.S. dollar equivalent value.
3

Record the revaluation of accounts payable to the current U.S. dollar equivalent.
4

Record the purchase of Swiss francs.
5

Record the settlement of the payables.