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

question 23

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 $.82.
November 2: Paid Le Monde for the merchandise purchased on October 1. The exchange rate at this date was $.83.
November 15: Sold merchandise to Nippon, a Japanese company for 300,000 yen on account. The rate of exchange was .0091.
November 20: The Japanese company paid the full amount. The exchange rate was .0090.
December 5: Sold merchandise to Ponti, an Italian company for $24,000. The exchange rate is .81. The Italian company agrees to pay in U.S. dollars.
December 18: Collected the full amount from the Italian company.

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Definitions:

Stated Interest Rate

The nominal or advertised interest rate on a loan or bond, not accounting for compounding or fees.

Interest Expense

The cost incurred by an entity for borrowed funds, represented as a financial charge for the privilege of borrowing money.

Bond Issuer

The entity, either a company or government, that borrows funds by issuing bonds.

Bond Premium

The additional amount paid over the face value of a bond, reflecting market interest rates lower than the bond's coupon rate.