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Foreign Currency - sgopaul - 11-19-2010
Suppose Bank A purchases foreign currency (USD 1000) from Bank B at the rate of Local Currency LC/USD 30 on 16/11/2010. The closing rate on 16/11/2010 is LC/USD 31.
In the books of Bank A, is the following entries correct?
DR Nostro USD1000@31 LC31,000
CR Bank B LC30,000
CR Profit on FOREX Transaction LC1,000
Can we book a profit on purchase of an asset?
Thanks 4 ur advice.