Muskoka Furniture Inc. (Muskoka) imports pine furniture from factories around the world for sale to retailers in Canada. On October 31, 20X4, Muskoka bought bedroom furniture set from a supplier in the United States for US$ 2,000. The invoice called for payment to be made on February 28, 20X5. On November 1, 20X4, Muskoka entered into a forward contract with a bank to hedge the existing monetary position by agreeing to buy US$ 2,000 on February 28, 20X5, at a rate of US$ 1 C$ 1.15. Muskoka’s year-end is December 31. On February 28, 20X5, Muskoka settled the forward contract with the bank and the US supplier was paid.
Spot rates were as follows:
October 31, 20X4...................... US$ 1 = C$ 1.14
November 1, 20X4....................... US$ 1 = C$ 1.14
December 31, 20X4............................ US$ 1 = C$ 1.16
February 28, 20X5...................... US$ 1 = C$ 1.19
The February 28, 20X5, forward rate on December 31, 20X4, was US$ 1 = C$ 1.165.

Required
Prepare journal entries to record all of the transactions, including any adjustments required on December 31, 20X4. Show your supporting calculations.