Charin Corporation, a U

question 37

Essay

Charin Corporation, a U.S.corporation, imports and exports small electronics.On December 1, 2011, Charin purchased components from an Egyptian manufacturer amounting to 500,000 Egyptian pounds.The purchase is payable in Egyptian pounds.At December 30, Charin wanted to take advantage of favorable exchange rates, but did not have the full amount required to pay off the entire amount.Charin wired the funds to pay off half of the balance owed, and expected to pay the remaining balance on January 3, 2012.Charin paid the remaining balance on January 3, 2012.
The respective exchange rates were as follows:
Required:
Document the journal entries related to these transactions for the four dates shown.If no entry is required, record "no entry."

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Definitions:

Par Value

Par Value is the nominal or face value of a stock or bond, as stated by the issuer, and has little relation to its market value.

Income Statement

The income statement is a financial report that summarizes the revenues, costs, and expenses incurred during a specific period of time, typically a fiscal quarter or year.

Total Liabilities

The aggregate of all debts and financial obligations a company owes to external parties.

Contra-Liability Account

An account that reduces the amount of a liability, often used to record discounts or allowances that decrease the total amount owed by a company.