C1. On October 15, our company has executed a purchase order for new equipment to be purchased from a supplier in Denmark for a purchase price of DKK 1.2 million. The equipment is deliverable on March 31. In order to hedge the commitment to pay DKK1.2 million, we enter into a forward exchange contract on October 15 to receive DKK1.8 million on March 31 at an exchange rate of $0.17: DKK1. Assume the following exchange gates:

Date	Spot Rates	Forward Rates
October 15	$0.15:DKK1	$0.17:DKK1
December 31	$0.16:DKK1	$0.18:DKK1
March 31	$0.20:DKK1	n/a

Required: Prepare the journal entries to record the following:

• Execution of the purchase order and forward contract
• Adjusting entries at December 31

Receipt of equipment and payment to equipment supplier on March 31.