On August 1, Deluka Computers, Inc

Multiple Choice

On August 1, Deluka Computers, Inc. purchased thirty computer chips, on account, from a company located in Taiwan for 520,000 Taiwan dollars. On that date the Taiwan dollar is worth $0.038. On September 1, when the Taiwan dollar was worth $0.04, payment was made. Deluka Computers uses the perpetual inventory system. The journal entry on August 1 by Deluka Computers, Inc. would be: (Round your final answer to the nearest dollar.)

A) debit Inventory $20,800 and credit Accounts Payable $20,800.
B) debit Inventory $19,760 and credit Accounts Payable $19,760.
C) debit Inventory $19,760, credit Foreign-Currency Transaction Gain -$1040, and credit Accounts Payable $20,800.
D) debit Inventory $19,760 and credit Cash $19,760.