Prepare Journal Entries for Each of the Following Transactions

question 143

Essay

Prepare journal entries for each of the following transactions.
1. Performed services for customers on account €6,000.
2. Purchased €20,000 of equipment on account.
3. Received €3,000 from customers in transaction 1.
4. The company paid dividends of €1,000.

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Definitions:

U.S. Dollars

The official currency of the United States, widely used as a benchmark and standard for international financial transactions.

Translation Adjustment

An accounting entry that arises when converting financial statements of foreign subsidiaries into the parent company's reporting currency, affecting comprehensive income.

Functional Currency

The currency of the primary economic environment in which an entity operates, generally the currency in which it primarily generates and expends cash.

Relative Value

A method of determining an asset's value that takes into consideration the value of similar or related assets.