On 10 april 2011, PIP limited provided some consulting advice to Cancun incorporated (us) for an agreed fee of US$1 million. The amount was paid into US bank aacount limited on 10 april 2011.
PIP lilited elected to leave the amount in the Us ban account , which pays interest each year on 31 March at a rate of 10 per cent .
The relevant exchange rates are:
10 april 2011 NZ $1.00 = US$0.78
31 March 2012 NZ $1.00 = US$0.75
Requiered
Provide the necessary journal entries in the books of PIP limited to account for the above transaction for the year ended 31 March 2012. Show your working please.