2. MDS is an international company which often enters into long-term contracts with foreign companies. At the present time, MDS has just completed a major contract with a Japanese company. The company considers that all the revenue has been earned, so has recorded a receivable as of November 1, 2012. The receivable will be settled on March 1, 2013, when the Japanese company will pay MDS 25,000,000 yen. The relevant exchange rates were quoted: Date Spot Rate Forward Rate (Delivery on 3/1) S 0.010108 0.010196 November 1 December 31 March S 0.009639 0.009816 0.010112 Prepare the journal entries to record the transaction, adjust the accounts at year-end, and settle the contract Journal 3. Use the information in Exercise 2. Assume the MD wants to hedge against an unfavorable exchange rate change, and acquired a forward contract on November 1 to sell the 25,000,000 yen for S0.010108 on March 1, 2013. Prepare the journal entries to account for the hedge. Journal