Jon-Jan Restaurants purchased green rice, a special variety of rice, from China for 100,000 renminbi on November 1, 20X8. Payment is due on January 30, 20X9. On November 1, 20X8, the company also entered into a 90 -day forward contract to purchase 100,000 reuminbi. The rates were as follows:

\section*{Required}
Select the correct answer for each of the following questions.
1. The entry on November 1, 20X8, to record the forward contract includes a:

a. Debit to Foreign Currency Receivable from Exchange Broker, 100,000 renminbi.

b. Debit to Foreign Currency Receivable from Exchange Broker, \(\$ 12,600\).

c. Credit to Premium on Forward Contract, \(\$ 600\).

d. Credit to Dollars Payable to Exchange Broker, \(\$ 12,600\).
2. The entries on December 31, 20X8, include a:

a. Debit to Financial Expense, \(\$ 300\).

b. Credit to Foreign Currency Payable to Exchange Broker, \(\$ 300\).

c. Debit to Foreign Currency Receivable from Exchange Broker, \(\$ 300\).

d. Debit to Foreign Currency Receivable from Exchange Broker, \(\$ 12,600\).
3. The entries on January 30, 20X9, include a:

a. Debit to Dollars Payable to Exchange Broker, \(\$ 12,000\).

b. Credit to Cash, \(\$ 12,600\).

c. Credit to Premium on Forward Contract, \(\$ 600\).

d. Credit to Foreign Currency Receivable from Exchange Broker, \(\$ 12,600\).
4. The entries on January 30, 20X9, include a:

a. Debit to Financial Expense, \(\$ 400\).

b. Debit to Dollars Payable to Exchange Broker, \(\$ 12,600\).

c. Credit to Foreign Currency Units (renminbi), \(\$ 12,600\).

d. Debit to Foreign Currency Payable to Exchange Broker. \(\$ 12,700\).
5. The entries on January 30, 20X9, include a:

a. Debit to Foreign Currency Units (renminbi), \(\$ 12,700\).

b. Debit to Dollars Payable to Exchange Broker, \(\$ 12,700\).

c. Credit to Foreign Currency Transaction Gain, \(\$ 100\).

d. Credit to Foreign Currency Receivable from Exchange Broker, \(\$ 12,600\).

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Date November 1, 20X8 Spot Rate $.120 December 31, 20X8 January 30, 20X9 .124 .127 Forward Rate $.126 (90-day) .129 (30-day)