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Q3. On December 1, 20X1, Rone Imports, a U.S. company, purchased clocks from Switzerland for...

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Accounting

Q3. On December 1, 20X1, Rone Imports, a U.S. company, purchased clocks from Switzerland for 15,000 francs (SFr), to be paid on January 15, 20X2. Rones fiscal year ends on December 31, and its reporting currency is the U.S. dollar. The exchange rates are:

December 1, 20X1 1 SFr = $0.70

December 31, 20X1 1 SFr = 0.66

January 15, 20X2 1 SFr = 0.68

Required:

  1. In which currency is the transaction denominated?
  2. Prepare journal entries for Rone to record the purchase, the adjustment on December 31, and the settlement.

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