On October 2, 20X8, Penn purchases goods for a U.S. dollar e…
On October 2, 20X8, Penn purchases goods for a U.S. dollar equivalent of $19,000 from a Swiss company. The transaction is denominated in Swiss francs (SFr). The payment is made on November 10. The exchange rates were as follows. Exchange Rates Date Currency Exchange rate October 2 1 Swiss franc = $ 0.95 November 10 1 Swiss franc = $ 0.92 What entry is required to re-value foreign currency payable to U.S.-dollar-equivalent value on November 10? (Hint: Translate accounts payable into Swiss francs first.) Options for Entry Required to Re-value Foreign Currency Option Accounts and explanation Debit Credit A Foreign currency transaction loss 570 Accounts payable (SFr) 570 B Accounts payable (SFr) 600 Foreign currency transaction gain 600 C Foreign currency transaction loss 600 Accounts payable (SFr) 600 D Accounts payable (SFr) 570 Foreign currency transaction gain 570