T-Accounts for Multicurrency Intercompany Settlements
The system creates a journal entry to credit the cash account for company 1 and debit the cash account for company 70. It records these entries in U.S. dollars (USD), as entered, in both the actual amount (AA) and foreign currency (CA) ledgers as shown:
When you post the journal entry, the system creates an adjusting entry in the AA ledger to convert the USD amount to EUR for company 70. The exchange rate is 1 USD = 1.08596 EUR. The system has already debited1,000.00 from company 70, so it debits an additional 85.96, as shown:
When you post the journal entry, the system creates additional automatic entries to transfer the money between the companies, as shown (the intercompany accounts receivable account is 1291):
See Also