Journal entry US$ to C$ transfer between 2 bank accounts. Exchange rate issue

lupusden_6115

Trying to record a journal entry in my Wave C$ account. I have a US$10,000 transfer from a US$ account to C$ account which shows as C$13,132.37. The exchange rate is known as these numbers are actually what happened but Wave is using a different exchange rate. How do I "fix" the exchange rate to 1.3132 so this journal works?

Liza_ko

I also have a similar problem. I'm trying to book an internal bank transfer from a USD bank account to a HKD account. How do I do this ? Should I do this in Journal transaction ? How do I book the exchange difference ? How do I know the book exchange rate set up in my Wave account in order to correctly book a foreign currency gain or loss ? Because I only took up from previous user.

JulianP

Hey there @lupusden_6115 and @Liza_ko !

If you have already, I suggest giving this article a read for some more insight: Transfers From a Foreign Currency Bank Account

Does your account reach a zero balance at any point? When a foreign currency account like this hits $0 and there's still a remaining "ghost" balance, we have a revaluation tool we can make use of to help correct this. If your account isn't at $0, the tool wouldn't help us out here but we do have some other steps you can use to create a manual revaluation entry.

1. Head to Accounting>Chart of Accounts and create a new “revaluation” account. It should be in your default business currency and a “Cash or Bank” account type.

2. Compare the current account value (either on the Transactions (if reconciled) page or via an external source, like your online banking) to the “historical” account value (the value on the reports, such as the Account Transactions, Trial Balance, and Balance Sheet).
   

3. If you want to adjust the balance sheet to match the Transactions page, you would have to adjust the bank account by subtracting the historical value from the current account value. You'll want to make a journal entry or an income/expense transaction (depending on if the value needs to increased or decreased) to the Revaluation account:

Now, when you look at the balance sheet or trial balance, the sum of the original bank account balance + the revaluation bank account balance will equal the current translated balance. The gain (or loss) on foreign exchange will be on the profit & loss report as well.

Hope that helps to clear things up!