Leigh of New York sells its products to customers in the United States and the United Kingdom. On December 16, 2013, Leigh sold merchandise on credit to Bronson Ltd. of London at a price of 15,000 pounds. The exchange rate on that day for £1 was $2.0321.

Leigh of New York sells its products to customers in the United States and the United Kingdom. On December 16, 2013, Leigh sold merchandise on credit to Bronson Ltd. of London at a price of 15,000 pounds. The exchange rate on that day for £1 was $2.0321. On December 31, 2013, when Leigh prepared its financial statements, the rate was £1 for $2.0260. Bronson paid its bill in full on January 15, 2014, at which time the exchange rate was £1 for $2.0280. Leigh immediately exchanged the 15,000 pounds for U.S. dollars.

 

Prepare Leigh’s journal entries on December 16, December 31, and January 15. (Round your intermediate calculations and final answers to the nearest dollar amount.) Explanation: Dec. 16, 2013 Record credit sales (15,000 × $2.0321) = $30,481   Dec. 31, 2013 Record year-end adjustment.     Foreign Exchange Loss           Original measure = (15,000 × $2.0321)   $ 30,481       Year-end measure = (15,000 × $2.0260)     30,390             Loss for the period   $ 91               Jan. 15, 2014 Cash (15,000 × $2.0280) = $30,420     Foreign Exchange Gain   Year-end measure = (15,000 × $2.0260) $ 30,390     Final measure    = (15,000 × $2.0280)     30,420             Gain for the period $ 30