Prepare Journal Entries for the Following Transactions for Inter-Global Co

question 68

Essay

Prepare journal entries for the following transactions for Inter-Global Co.
October 10: Purchased merchandise on account from Le Monde, a French company, for 80,000 euros. The exchange rate was $0.82.
November 2: Paid Le Monde for the merchandise purchased on October 1. The exchange rate at this date was $0.83.
November 15: Sold merchandise to Nippon, a Japanese company for 300,000 yen on account. The rate of exchange was $0.0091.
November 20: The Japanese company paid the full amount. The exchange rate was $0.0090.
December 5: Sold merchandise to Ponti, an Italian company for $24,000. The exchange rate is $0.81. The Italian company agrees to pay in U.S. dollars.
December 18: Collected the full amount from the Italian company.

---

Definitions:

Accounts Payable

Money owed by a business to its suppliers or creditors for goods and services received but not yet paid for.

Revolving Credit Agreement

A credit arrangement that allows a company or individual to borrow, repay, and borrow again up to a certain credit limit.

Commitment Fee

A fee charged by a bank for guaranteeing to have loanable funds available. The fee is charged on un borrowed amounts up to the maximum of the guarantee. See Revolving credit agreement.

Line of Credit

An arrangement between a financial institution and a customer that establishes a maximum loan balance the borrower can access.