Case 6.3 Eagle Corp., a U.S. corporation, received an order on November 1, 2013, to sell two machines to Crown Company, for 95,000 foreign currency units (FCU). The machines were to be delivered and the amount collected on March 1, 2014. In order to hedge its commitment, Eagle entered into a forward contract for 95,000 FCU with delivery on March 1, 2014. The forward contract met all conditions for hedging. Eagle Corp. has an incremental borrowing rate of 12% per year Selected exchange rates for FCU at various dates were as follows: $1.3076 1.2980 1.3060 1.3150 1.2972 November 1, 2013-Spot rate Forward rate for delivery on March 1, 2014 December 31, 2013-Spot rate Forward rate for delivery on March 1, 2014 March 1, 2014- Spot rate Required 1. Record the journal entries needed by Eagle on November 1 and December 31, 2013, and March 1, 2014. Round all entries to the nearest whole dollar (10 points) 2. Answer the following questions Indicate the amount of the discount or premium that the foreign currency was originally sold at in the foreign currency market (1 point) What is the net impact on Eagle's December 31, 2013 Stockholder equity related to this transaction? (1 point) What is the accumulated net impact at March 1, 2014 on Eagle's Stockholder equity related to this transaction? (1 point) What would have been the net impact on Eagle's December, 31 2013 Stockholder equity related to this transaction if Eagle had not entered in the Forward Contract? (1 point) What would have been the accumulated net impact on Eagle's Stockholder equity related to this transaction at March 1, 2014 if Eagle had not entered in the Forward Contract? Was Eagle better- or worst off with the derivative contract? (1 point) a. b. c. d. e