On April 1, a U.S. manufacturer enters into a commitment to sell equipment to a British importer with the sale denominated in pounds sterling £500,000. The goods are to be delivered the same day and paid for on June 1.

a. Assuming that no forward contract is entered into, what would be the journal entries for the U.S. exporter on April 1, April 30, May 31, and June 30? Assume the books are closed each month.

b. Assuming that a forward contract is entered into on April 1, what would be the journal entries for the U.S. exporter on April 1, April 30, May 31, and June 30?