1. On November 1, 2024, American Company sold inventory to a foreign customer. The account will be settled on March 1 with the receipt of $500,000 foreign currency units (FCU). On November 1, American also entered into a forward contract to hedge the exposed asset. The forward rate is $0.70 per unit of foreign currency. American has a December 31 fiscal year-end. Spot rates on relevant dates were:

Date

November 1 $0.73

December 31 $0.71

March 1 $0.74

The entry to record the forward contract is

A.FCU Receivable, 350,000; Premium on Forward Contract, 15,000; Dollars Payable, 365,000

B.Dollars Receivable, 350,000; Discount on forward Contract, 15,000; FCU Payable, 365,000

C. Dollars Receivable, 365,000; Discount on Forward Contract, 15,000; FCU Payable, 350,000

D. FCU Receivable 365.000: Discount on Forward Contract. 15.000: Dollars Pavable 350.000

1. Un ivovember 1, 204, American Company soia inventory to a roreign customer. Ine account wiII de settled on March 1 with the receipt of $500,000 foreign currency units (FCU). On November 1 , American also entered into a forward contract to hedge the exposed asset. The forward rate is $0.70 per unit of foreign currency. American has a December 31 fiscal year-end. Spot rates on relevant dates were: The entry to record the forward contract is FCU Receivable, 350,000 ; Premium on Forward Contract, 15,000; Dollars Payable, 365,000 Dollars Receivable, 350,000; Discount on Fyward Contract, 15,000; FCU Payable, 365,000 Dollars Receivable, 365,000; Discount on Forward Contract, 15,000; FCU Payable, 350,000 (n) Friu Rereivable 365.000 : Discount on Forward Contract 15000 : Dollars Pavable 350.000