On 25 June, Wattle Ltd Acquires Equipment on Credit Terms

Multiple Choice

On 25 June, Wattle Ltd acquires equipment on credit terms from a New Zealand supplier, Timaru Ltd, for NZ$240 000. The exchange rate at 25 June was NZ$1.00 = A$095. On 30 June the exchange rate is NZ$1.00 = A$0.90. Wattle Ltd pays Timaru Ltd in full on 7 July when the exchange rate is NZ$1.00 = A$0.92. The journal entry recorded by Wattle Ltd to remeasure the outstanding foreign currency monetary unit at 30 June is:

A) DR Foreign Exchange Loss A$13 235; Payable to Timaru Ltd A$13 235
B) DR Payable to Timaru Ltd A$13 235; Foreign Exchange Gain A$13 235
C) DR Foreign Exchange Loss A$9 000; Payable to Timaru Ltd A$9 000
D) DR Payable to Timaru Ltd A$9 000; Foreign Exchange Gain A$9 000