On December 5,20X8,Texas based Imperial Corporation purchased goods from a Saudi Arabian firm for 100,000 riyals (SAR),to be paid on January 10,20X9.The transaction is denominated in Saudi riyals.Imperial's fiscal year ends on December 31,and its reporting currency is the U.S.dollar.The exchange rates are:

-Based on the preceding information,what journal entry would Imperial make on December 31,20X8,to revalue foreign currency payable to equivalent U.S.dollar value?
A)Option A
B)Option B
C)Option C
D)Option D

Question

On December 5,20X8,Texas based Imperial Corporation purchased goods from a Saudi Arabian firm for 100,000 riyals (SAR),to be paid on January 10,20X9.The transaction is denominated in Saudi riyals.Imperial's fiscal year ends on December 31,and its reporting currency is the U.S.dollar.The exchange rates are:
 
-Based on the preceding information,what journal entry would Imperial make on December 31,20X8,to revalue foreign currency payable to equivalent U.S.dollar value?
A)Option A 
B)Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

The correct journal entry would involve adjusting the foreign currency payable to reflect its current U.S. dollar value as of December 31, 20X8, which is typically done by recognizing a foreign exchange gain or loss.

On December 5,20X8,Texas Based Imperial Corporation Purchased Goods from a Saudi