Prepare the relevant journal entries to record transaction

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On 1 February 2020, Ford Ltd an Australian company completes a binding agreement to purchase a hydraulic lift from a manufacturer located in Germany. The cost of the equipment is €150 000. The construction of the lift is completed on 30 May 2020, and it is considered to be a qualifying asset according to AASB 123. The amount owing has not been paid by reporting date 30 June 2020.

The following is information about the exchange rates:

Date                               Exchange rate
1 February 2019         AU$1 = EU€0.60
30 May 2020              AU$1 = EU€0.56
30 June 2020              AU$1 = EU€0.46

Problem 1: You are required to prepare the relevant journal entries to record the transaction and subsequent events in accordance with AASB 121 (rounded to the nearest whole A$)?

Reference no: EM132644971

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