6 Record the revaluation of the foreign currency payable using the spot rate and recognizing the change into current earnings as specified by ASC 830. 7 Record the reclassification amount from OCI sufficient to completely offset the foreign currency transaction gain on the foreign currency payable (A$) that was hedged with a derivative designated as a cash flow hedge. 8 Record the delivery of U.S. dollars to an exchange broker. 9 Record the receipt of A$160,000 from the broker in accordance with the forward contract signed on December 1. 10 Record the delivery of A$160,000 to a foreign creditor. Check my work 4 On December 1, 20x1, Micro World Inc. entered into a 120-day forward contract to purchase 160,000 Australian dollars (A$). Micro World's fiscal year ends on December 31. The direct exchange rates follow: 20 points Date December 1, 2001 December 31, 20x1 January 30, 20X2 March 31, 20X2 Spot Rate $0.600 0.610 0.608 0.602 Forward Rate for March 31, 20X2 $0.609 0.612 0.605 eBook Print References Required: Prepare all journal entries for Micro World Inc. for the following independent situations: c. The forward contract was to hedge an anticipated purchase of furniture on January 30. The purchase took place on January 30 with payment due on March 31, 20x2. The derivative is designated as a cash flow hedge. The company uses the forward exchange rate to measure hedge effectiveness. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the 120-day forward contract signed as a cash flow hedge of the forecasted foreign currency transaction of the purchase of furniture on January 30 for A$160,000. Note: Enter debits before credits. Date General Journal Debit Credit Dec. 1, 20X1 2 Record the revaluation of the foreign currency receivable to fair value and record OCI for the effective portion of the change in fair value of the derivative designated as a cash flow hedge. 1 3 Record the revaluation of the foreign currency receivable to the current U.S. dollar equivalent and record OCI for the effective portion of the change in fair value of the derivative designated as a cash flow hedge. 4 Record the acquisition of the furniture and its value at the spot rate. 5 Record the revaluation of the foreign currency receivable and record into OCI the effective portion of change in fair value of the derivative designated as a cash flow hedge