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Abc corp "USA" purchased goods on account for 1,500 British pounds at spot rate $1.50. When settled debt, spot rate was $1.45. Make journal entries?

MBA Finance
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Question added by Ajay Dutt , Senior Accountant , Concept Zone Group of Companies
Date Posted: 2015/06/25
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Ajay Dutt
by Ajay Dutt , Senior Accountant , Concept Zone Group of Companies

Purchases $2,250  (1500*1.50) When purchased the spot rate was $1.50

   A/c Payable       $2,250

 

A/c Payable $2,250

        Cash                                  $2,175 (1500*1.45) When paid the spot rate was $1.45 

        Currency exchange gain       $750                                    

 

Afaq Haider
by Afaq Haider , General Accountant , Spar Steel Industries LLC

75 exchange gain is correct 

 

mehfooz alam khan habib khan
by mehfooz alam khan habib khan , Security Incharge , Landmark Group (Emax)

Purchase entry: Purchase.15000 dr. Account payable.15000 cr. Note:15000 pound dollar spot rate1.45$15000*1.45$ =21750$ When paid: Account payable.21750$ dr. Exchange loss.750$ dr. Cash.22500$ cr. Note: dollar value down against pound when payment maid.

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