Using a double-entry system, how is a currency conversion and transfer recorded?
Example:
- 5 Items sell on eBay in USD
- the USD Funds are deposited directly into a USD PayPal Account
- USD eBay Fees are paid using those funds
- the remaining funds are Converted & Transferred to a CAD PayPal Account
Typical Entry based on the Example:
- Sale Made: debit to ‘A/R USD’ and credit to ‘Income: Sales USD’
- Buyer Pays using PayPal: credit to ‘A/R USD’, debit to PayPal (USD) split with debit to ‘Expense: PayPal Fees USD’’
- eBay Monthly Fee: credit to ‘PayPal (USD)’ debit to ‘eBay Fees USD’
- Currency Conversion: credit to ‘PayPal (USD)’ then ??? and debit to PayPal (CAD)
- Transfer: credit to PayPal (CAD) debit to ‘Bank Account (CAD)’
Example:
- 5 Items sell on eBay in USD
- the USD Funds are deposited directly into a USD PayPal Account
- USD eBay Fees are paid using those funds
- the remaining funds are Converted & Transferred to a CAD PayPal Account
Typical Entry based on the Example:
- Sale Made: debit to ‘A/R USD’ and credit to ‘Income: Sales USD’
- Buyer Pays using PayPal: credit to ‘A/R USD’, debit to PayPal (USD) split with debit to ‘Expense: PayPal Fees USD’’
- eBay Monthly Fee: credit to ‘PayPal (USD)’ debit to ‘eBay Fees USD’
- Currency Conversion: credit to ‘PayPal (USD)’ then ??? and debit to PayPal (CAD)
- Transfer: credit to PayPal (CAD) debit to ‘Bank Account (CAD)’