On September 15,20X2, Wall Company , a U.S. firm, purchased a piece of equipment from a foreign firm for 500,000 in foreign currency. Payment for the equipment was to be made in foreign currency on January 15, 20X3. The spot rates and selected dates were as follows:
- DATE Spot Rate
- 9/15/X2 1Foreign currency = $0.30
- 12/31/X2 1 Foreign currency = $0.33
- 1/15/X3 1 Foreign currency = $0.315
Assuming that the US corp. has a December 31 year end , prepare necessary journal entries to account for the series of transactions involving the purchase.