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Merchant Company had the following foreign currency transactions:

1. On November 1, 20X6, Merchant sold goods to a company located in Munich, Germany. The receivable was to be settled in European euros on February 1, 20X7, with the receipt of 240,000 by Merchant Company.
2. On November 1, 20X6, Merchant purchased machine parts from a company located in Berlin, Germany. Merchant is to pay 120,000 on February 1, 20X7.

The direct exchange rates are as follows:

November 1, 20X6	1 = $	0.60
December 31, 20X6	1 = $	0.62
February 1, 20X7	1 = $	0.58

Required: Record the T-accounts for the following transactions (Record the transactions in the given order.)

1. The November 1, 20X6, export transaction (sale).
2. The November 1, 20X6, import transaction (purchase).
3. The December 31, 20X6, year-end adjustment required of the foreign currencydenominated receivable of 240,000.
4. The December 31, 20X6, year-end adjustment required of the foreign currencydenominated payable of 120,000.
5. The February 1, 20X7, adjusting entry to determine the U.S. dollarequivalent value of the foreign currency receivable on that date.
6. The February 1, 20X7, adjusting entry to determine the U.S. dollarequivalent value of the foreign currency payable on that date.
7. The February 1, 20X7, settlement of the foreign currency receivable.
8. The February 1, 20X7, settlement of the foreign currency payable.

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