A US Company Takes Delivery of Goods from a Supplier in in Hong

Essay

A U.S. company takes delivery of goods from a supplier in Hong Kong on December 1, 2020, at an invoice price of HK$100,000. The company purchases Hong Kong dollars in the spot market and pays the supplier on March 1, 2021. The U.S. company has a December 31 year-end. Spot rates ($/HK$) are as follows:
$$\begin{array} { | l | c | } \hline & \text { Spot Rate } \\\hline \text { December 1, 2020 } & \$ 0.128 \\\hline \text { December 31, 2020 } & 0.126 \\\hline \text { March 1, 2021 } & 0.130 \\\hline\end{array}$$ Required :Prepare the U.S. company's journal entries to record these events.