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Car ID Inc. is a U.S.-based distributor of auto supplies for several domestic and foreign car companies. On November 1, Year 1, Car ID sold

Car ID Inc. is a U.S.-based distributor of auto supplies for several domestic and foreign car companies. On November 1, Year 1, Car ID sold and shipped auto parts to a customer in Switzerland for a price of 500,000 Swiss francs (CHF). Payment is to be received on January 30, Year 2. On the date of sale, Car ID also entered into a three-month forward contract to sell CHF 500,000. The forward contract is properly designated as acash flow hedge of a foreign currency receivable. Car ID's incremental borrowing rate is 12%. The present value factor for one month at an incremental borrowing rate of 12% is .99010. Relevant exchange rates are as follows:

SpotForward Rate

DateRate(to January 30, Year 2)

November 1, Year 1. . . . . . . . . . . . . .$0.500$0.495

December 31, Year 1. . . . . . . . . . . . . .0.5200.516

January 30, Year 2. . . . . . . . . . . . . . . .0.4900.490

What are all the necessary journal entries to account for the sale and foreign currency forward contract. Assume that Car ID Inc. closes the books and prepares financial statements on December 31, Year 1.

Where appropriate, round to 2 decimal points.

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