Question

Pl show all the calculations and proper formatting. No plagiarism, please.

What is a journal entry and how is it written for finance? Please help record a journal entry for each of the following transactions:

a. A U.S.-based MNC invests $800 million in a factory located in South Africa and finances the project by issuing bonds in Germany.

b. A Mexican company sells $5 million worth of goods to an Arizona company and deposits the check-in a bank in Scottsdale.

c. The Bank of Denmark purchases 1.3 billion dollars in the foreign exchange market to hold down the value of the krone and uses these dollars to buy U.S. Treasury bonds.

d. A U.S.-based MNC pays $9 million in dividends to foreign residents. Those residents decide to hold the dividends in bank deposits in New York.

e. A U.S. car manufacturer exports $110 million of cars to the Philippines and receives payment in the form of a check drawn on a U.S. bank.

Answer 1

a. investment a/c dr. $ 800 million

To, factory building (south africa) $ 800 million

(invested $ 800 million in a factory)

cash a/c dr. $ 800 million

To, bonds $ 800 million

(bonds issued to finance the project)

b.    Arizona 's a/c dr. $ 5 million

To, sales a/c $ 5 million

($ 5 million worth goods sold to Arizona company)

  

bank a/c dr. $ 5 million

To, Arizona ,s a/c $ 5 million

( cheque deposited in a bank in Scottsdale)

c. cash a/c dr. $ 1.3 billion

To, foriegn exchange a/c $ 1.3 billion

( dollar purchased from foriegn exchange market)

treasury bonds a/c dr. $ 1.3 billion

to, cash a/c $ 1.3 billion

( treasury bonds purchased)

d. dividends a/c dr. $ 9 million

to, cash a/c $ 9 million

( paid dividends)

bank a/c dr. $9 million

to dividends a/c $ 9 million

(bank a/c credited by dividend)

e.   cash a/c dr. $ 110 million

to, sales $ 110 million

(payment from the export of cars to Philippines)