5 Problem 1: Give the answers to Questions 5 to 9 using the information in Problem 1. Problem 1: On Dec. 5, 2018, a US firm purchased inventory for 400,000 Pounds for which the payment will be made on March 20, 2018. The firm's fiscal year ends on December 31. Following are the spot rates and forward rates for Pounds: Dates Dec. 5, 2018 Spot Rate Forward Rate $1.040 $1.042 Dec. 31, 2018 $1.045 $1.049 Mar 20 2018 $1.060 $1.060 0 On Dec. 5, 2010 the US firm entered into a forward contract to buy 400,000 Pounds on March 20, 2018 for $1.042. The journal entry to record the forward contract on Dec 5 will be Debit foreign currency receivable $416,800, credit dollars payable $416,800 Debit dollars receivable $416,800, credit foreign currency payable $416,800 Debit foreign currency receivable $416,000, credit dollars payable $416,000 Debit dollars receivable $416,000, credit foreign currency payable $416,000 to save and submit. Click Save All Answers to save all answers. Pro Save All Ars QUESTION 6 In the question above, the rate of $1.049 means that anyone can buy 400,000 Euros on Dec 31 for $1.049 from the market on that day. O True O False QUESTION 7 For the forward contract, the gain or loss recorded on Dec 31 will be O Gain of $2,800 O Loss of $2,800 O Gain of $2,000 O Loss of $2,000 ESTION 8 the forward contract, the gain or loss recorded on Mar 20 will be to save and submit. Click Save All Answers to save all answers. ok Pro Save All Ans QUESTION 8 For the forward contract, the gain or loss recorded on Mar 20 will be O Gain of $4,400 O Loss of $4,400 O Gain of $6,000 O Loss of $6,000 QUESTION 9 On Mar 20, to carry out the forward contract, the US firm will O Give cash amount of $416,800 to the exchange dealer. O Receive cash amount of $424,000 from the exchange dealer. O Give cash amount of $424,000 to the exchange dealer and submit. Click Save All Answers to save all answers. Sive Al