Journal Entries
Assume the following spot exchange rates between the U.S. dollar and the British pound sterling:
April 1 $1.8685
April 30 $1.8258
May 31 $1.7740
On April 1, ABC, Inc., a U.S. international company, sells goods to a British importer for £1,000,000. Payment is to be received on May 31, and ABC, Inc. adjusts its financial statements quarterly. What are the journal entries for ABC, Inc. on April 1, April 30, and May 31? Was the dollar strengthening or weakening over the period of the contract?