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Question: On December 1, Year 1, El Primero Company purchases inventory from a foreign supplier for 40,000 coronas. Payment will be made in 90 days after El Primero has sold this merchandise. Sales are made rather quickly and El Primero pays this entire obligation on February 15, Year 2. The following exchange rates for 1 corona apply:
Date U.S. Dollar Per Corona
December 1, Year 1 ...................................... $0.87
December 31, Year 1 ......................................... 0.82
February 15, Year 2 ........................................ 0.91
Required: Prepare all journal entries for El Primero in connection with the purchase and payment.
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