At the end of the fiscal year, December 31, 20X2, Avonlea Ltd. finds itself with two accounts receivable in pesos:1. From a sale on July 1, 20X2, and due to be collected on December 1, 20X3, for...

At the end of the fiscal year, December 31, 20X2, Avonlea Ltd. finds itself with two accounts receivable in pesos:1. From a sale on July 1, 20X2, and due to be collected on December 1, 20X3, for 1,000,000 pesos.2. From a sale on September 1, 20X2, and due to be collected on February 1, 20X4, for 2,000,000 pesos.Exchange rates (spot):July 1, 20X2…………………….. $ 1 = 16 pesosSeptember 1, 20X2…………………. $ 1 = 17 pesosDecember 31, 20X2…………………. $ 1 = 18 pesosDecember 1, 20X3…………………… $ 1 = 11 pesosDecember 31, 20X3…………………. $ 1 = 9 pesosRequiredPrepare the journal entries for December 31, 20X2, and December 1 and December 31, 20X3, assuming that the foreign exchange risk is not hedged.View Solution:

At the end of the fiscal year December 31 20X2