Exporting Transactions-Journal Entries
Jung Farms Exports Wheat to Germany

question 54

Essay

Exporting transactions-journal entries
Jung Farms exports wheat to Germany. In the space provided below, prepare journal entries to record the following events.
Nov. 15, 2010: Sold wheat to a German restaurant chain at a price of 2 million Euros, due in 90 days. The current exchange rate is .8 U.S. dollars per Euro. (Jung uses the periodic inventory method.)
Dec. 3, 2010: Jung made a year-end adjusting entry relating to the account receivable from the German restaurant chain. The exchange rate at year-end is .85 U.S. dollars per Euro.
Feb. 15, 2011: Received a check for $1,640,000 from the InterContinental Bank in full settlement of the receivable from the German restaurant chain. The exchange rate at this date is .82 U.S. dollars per Euro. $$\begin{array} { | c | l | l | l | } \hline \mathbf { 2 0 1 0 } & \text { General Journal } & \\\hline \text { Nov.15 } & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline \text { Dec.31 } & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline \mathbf { 2 0 1 1 } & & & \\\hline \text { Feb.15 } & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline\end{array}$$

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Definitions:

Electronic Negotiable Instruments

Financial instruments that are signed electronically and promise to pay a certain sum of money to the bearer or assigned party.

Money Order

A type of draft that may be purchased from banks, post offices, telegraph companies, and express companies as a substitute for a check.

Draft

A preliminary version of a piece of writing, document, or plan which is subject to further revision or editing.

Big Bank

A big bank refers to a large, multinational banking institution that offers a wide range of financial services, often with significant influence in economic policies and markets.