On January 1, 2020, Ginseng Inc. entered into a forward contract to purchase U.S. $6,000 for $6,336
Question:
On January 1, 2020, Ginseng Inc. entered into a forward contract to purchase U.S. $6,000 for $6,336 Canadian in 30 days. On January 15, the fair value of the contract was $40 (reflecting the present value of the future cash flows under the contract). Assume that the company would like to update its records on January 15.
(a) Prepare only the necessary journal entries on January 1 and 15, 2020.
(b) Explain which financial risks the transaction exposes the entity to.
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a January 1 2020 No journal entry necessary since the fair value of the fo...View the full answer
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Related Book For 
Intermediate Accounting Volume 2
ISBN: 9781119497042
12th Canadian Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
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