Following are transactions of L’Anse Ltd., a company engaged in importing products into Canada.
September 1, 20X3: Incurred a liability for 1,000,000 pesos, due February 1, 20X4, for purchasing inventory.
October 1, 20X3: Incurred a liability for 6,000,000 yen, due November 1, 20X4, for purchasing inventory.
November 1, 20X3: Incurred a liability for 22,000 Brazilian reals, due March 1, 20X5, for purchasing inventory.
Exchange rates:
September 1, 20X3
$ 1 15 pesos ...................... Spot rate
$ 1 12 pesos................... .... Forward contract rate
October 1, 20X3
$ 1 80 yen....................... Spot rate
$ 1 95 yen........................ Forward contract rate
November 1, 20X3
$ 1 1.80 reals...................... Spot rate
$ 1 1.60 reals...................... Forward contract rate
December 31, 20X3, spot rates:
$ 1 10 pesos
$ 1 100 yen
$ 1 1.50 reals
Relevant December 31, 20X3, forward rates:
$ 1 9 pesos
$ 1 105 yen
$ 1 1.45 reals

Required
Parts (1) and (2), below, are based on different policies regarding hedging. Answer each part as an independent problem.
1. L’Anse Ltd. did not hedge or cover its exchange risk position. Prepare the journal entries for 20X3. The company has a December 31 year-end.
2. At the time of each transaction, L’Anse Ltd. entered into a forward contract, which was a perfect and complete hedge against the foreign exchange risk. Prepare the journal entries for 20X3. The company has a December 31 year-end.