A U.S. company, G.Marx Co., purchases and receives video games from a Japanesecompany, Saki Corporation, on October 20, Year 7. The transactionis denominated in yen and calls for Marx to pay Saki 2 million yenon January 15, Year 8. The spot rate for yen is $.01015 at the timeof the transaction. The spot rate is $.01005 on October 31, Year 7,Marx's fiscal year end, and $.01030 on January 15, Year 8.
G. Marx Co. has twowholly owned subsidiaries, H. Marx of Canada and C. Marx of France.Functional currencies are the Canadian dollar for H. Marx and theeuro for C. Marx. However, C. Marx keeps its books in a currencythat is not the functional currency or the reporting currency.
G. Marx also recentlydisposed of a long-term investment in Z. Marx of Mexico, aconsolidated entity whose functional currency was the peso.
Enter the appropriateamounts for the following journal entries recorded by MarxCorporation for its transaction with Saki Corporation.
To prepare eachrequired journal entry:
- Enter the corresponding debit or credit amount in theassociated column.
- Round all amounts to the nearest whole number.
- Not all rows in the table might be needed to complete eachjournal entry.
- If no journal entry is needed, check the “No entry required”box at the top of the table as your respons
