Reference no: EM133068141

Using the double-entry accounting system, show how the following transactions will generate credits and debits in the Australian Balance of Payments (BoP) accounts. Please specify clearly which category (and sub-category) within the BoP accounts each credit or debit will appear. For example, a debit can appear in the Current Account, sub- category Goods.

(i) A Chinese firm imports mining products from an exporting firm in Australia. The Chinese firm pays for its import by transferring funds from its account with a bank in Melbourne to the Australian firm's account with the same bank.

(ii) An Australian firm borrows money from a bank in Japan. The Japanese bank transfers money to the Australian firm's bank account held at the (Japanese) bank.

(iii) An Australian citizen visits Vietnam and has dinner at a local restaurant. He pays for the meal using his credit card issued by a bank in the United States.