Based upon recording balance of payment BOP transactions det

Based upon recording balance of payment (BOP) transactions, determine whether or not the following is a debit, credit, or no entry to the U.S. Balance of Payment statement. Also determine what chart of account is affected (i.e., CA, KA, or OSB): CA: Current Account KA: Capital Account OSB: Official Settlement Balance U.S. resident purchases Mercedes Benz C230/ U.S. resident purchases Chevrolet Impala/ Foreigner purchases GE dryer U.S. resident purchases UK stock, and U.S. resident borrows funds from British broker to purchase stock.

Solution

U.S. resident purchases Mercedes Benz C230/ is debited in the balance of payments. BOP debit for the increase in the assets and BOP credit for the payment of liability. It affects OSB account U.S. resident purchases Chevrolet Impala/ is debited in the balance of payment. It affects the OSB account. Foreigner purchases GE dryer is debited in the balance of payment. It affects the OSB account. U.S. resident purchases UK stock, is debited in the balance of payment. Here the capital account is affected. U.S. resident borrows funds from British broker to purchase stock. It is affecting the capital account. It is debited as it demands the nation;s need for the foreign currency.