PT Limited began purchasing parts from China. The Chinese currency is the renminbi (RMB). PT entered into the following transactions in 2004 and 2005:

Required:
Prepare the journal entries for these transactions, including any adjusting entries needed at the December 31, 2004, fiscal year-end. Specify if no entry is required on any specific date(s).

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November 1, 2004 December 1, 2004 December 31, 2004 January 15, 2005 Ordered machine parts from the Chinese supplier for RMB2,000,000. The supplier promised to deliver the machine parts at the beginning of December, and payment is expected on January 15, 2005. Received shipment of the machine parts. November 1, 2004 December 1, 2004 December 31, 2004 January 15, 2005 Acquired a forward contract to receive RMB2,000,000 on January 15, 2006, as a hedge of the account payable to the Chinese supplier. The forward contract rate was RMB1 = C$0.16. PT treats all forward con- tracts as executory contracts. Received RMB2,000,000 on the forward contract; paid RMB2,000,000 to the Chinese supplier in settlement of the payable. Spot rates were as follows: RMB1 = C$0.15 RMB1 = C$0.18 RMB1 - C$0.17 = RMB1 = C$0.19