#1

On October 1, 2018, Eagle Company forecasts the purchase of inventory from a British supplier on February 1, 2019, at a price of 100,000 British pounds. On October 1, 2018, Eagle pays $1,800 for a three-month call option on 100,000 pounds with a strike price of $2.00 per pound. The option is considered to be a cash flow hedge of a forecasted foreign currency transaction. On December 31, 2018, the option has a fair value of $1,600. The following spot exchange rates apply: Date Spot Rate October 1, 2018 $ 2.00 December 31, 2018, 1.97 February 1, 2019, 2.01 ________________________________________ What is the amount of Adjustment to Accumulated Other Comprehensive Income for 2019 from these transactions?

#2

To account for a forward contract cash flow hedge of a foreign currency-denominated asset or liability at the balance sheet date - what would you do. Please explain step by step all transactions.