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Can someone help me to solvequestions, Thank you. 1/ On 1 March 2017 Cron Ltd entered a transaction with the American Eagles Inc (a United

Can someone help me to solvequestions, Thank you.

1/ On 1 March 2017 Cron Ltd entered a transaction with the American Eagles Inc (a United States firm) for the sale USD500,000 of scrummaging machines. The equipment is to be air freighted on 2 May 2017 and payment is due on 1 August 2017.

Cron Ltd is concerned about exchange rate fluctuations and on 1 March purchases an option to sell USD500,000 at an exchange rate 0.7500 for delivery on 1 August 2017. Cron Ltd pays $15,500 for the option at this time. On 2 May 2017 the option is worth $1,500 and on 30 June 2017 the value of the option is $20,500.

The exchange rates over this period are:

1 March 2017

AUD1.00 = USD0.7600

2 May 2017

AUD1.00 = USD0.7400

30 June 2017

AUD1.00 = USD0.7700

1 August 2017

AUD1.00 = USD0.8000

How to prepare journal entries for Cron Ltd that are required byAASB 121 Foreign Currenciesand AASB 132 / 139Financial Instrumentsto record the above transactions, including the adjustments at year end (30 June 2017). Cron Ltd does not designate the option as a hedge.

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