Che Vino Veritas Company, a US-based importer of wines and spirits, placed an order with a French supplier for 2,000 cases of wine at a price of 310 euros per case. The total purchase price is 620.000 euros. Relevant exchange rates for the euro are as follows: Spot Rate $ 1.55 Forward Rate to October 31 $ 1.61 Date September 15 September 30 October 31 Call Option Premium for October 31 (strike price $1.55) $8.055 e.09 6.100 Vino Veritas Company has an incremental borrowing rate of 12 percent (1 percent per month) and closes the books and prepares financial statements at September 30. a. Assume that the wine arrived on September 15, and the company made payment on October 31. There was no attempt to hedge the exposure to foreign exchange risk. Prepare journal entries to account for this import purchase b. Assume that the wine arrived on September 15, and the company made payment on October 31. On September 15, Vino Veritas entered into a 45-day forward contract to purchase 620.000 euros. It properly designated the forward contract as a fair value hedge of a foreign currency payable. Prepare journal entries to account for the import purchase and foreign currency forward contract c. Vino Veritas ordered the wine on September 15. The wine arrived and the company paid for it on October 31. On September 15. Vino Veritas entered into a 45-day forward contract to purchase 620.000 euros. The company properly designated the forward contract as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is measured by referring to changes in the forward rate. Prepare journal entries to account for the foreign currency forward contract, firm commitment, and import purchase d. The wine arrived on September 15, and the company made payment on October 31 On September 15, Vino Veritas purchased a 45. day call option for 620.000 euros. It properly designated the option as a cash flow hedge of a foreign currency payable. Prepare Vino Veritas Company has an incremental borrowing rate of 12 percent (percent per month) and closes the books and prepares financial statements at September 30. a. Assume that the wine arrived on September 15, and the company made payment on October 31. There was no attempt to hedge the exposure to foreign exchange risk. Prepare journal entries to account for this import purchase. b. Assume that the wine arrived on September 15, and the company made payment on October 31. On September 15, Vino Veritas entered into a 45-day forward contract to purchase 620.000 euros. It properly designated the forward contract as a fair value hedge of a foreign currency payable. Prepare journal entries to account for the import purchase and foreign currency forward contract c. Vino Veritas ordered the wine on September 15. The wine arrived and the company paid for it on October 31. On September 15, Vino Veritas entered into a 45 day forward contract to purchase 620.000 euros. The company properly designated the forward contract as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is measured by referring to changes in the forward rate. Prepare journal entries to account for the foreign currency forward contract, firm commitment, and import purchase. d. The wine arrived on September 15, and the company made payment on October 31. On September 15, Vino Veritas purchased a 45. day call option for 620.000 euros. It properly designated the option as a cash flow hedge of a foreign currency payable. Prepare journal entries to account for the import purchase and foreign currency option e. The company ordered the wine on September 15. It arrived on October 31, and the company made payment on that date. On September 15, Vino Veritas purchased a 45-day call option for 620.000 euros. It properly designated the option as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is measured by referring to changes in the spot rate. Prepare journal entries to account for the foreign currency option, firm commitment, and import purchase Ched Assume that the wine arrived on September 15, and the company made payment on October 31. There was no attempt to hedge the exposure to foreign exchange risk. Prepare journal entries to account for this import purchase. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction list View journal entry worksheet Debit Credit No 11 Date 09/15 General Journal Inventory Accounts payable (euro) 2 09/30 Foreign exchange loss Accounts payable (euro) 3 10/31 - Foreign exchange loss Accounts payable (euro) 1 10/31 Foreign currency (euro) Cash 10/31 Accounts payable (euro) Foreign currency (euro) - Assume that the wine arrived on September 15, and the company made payment on October 31. On September 15, Vino Veritas entered into a 45-day forward contract to purchase 200.000 euros. It properly designated the forward contract as a fair value hedge of a foreign currency payable. Prepare journal entries to account for the import purchase and foreign currency forward contract. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Round your present value interest factor to four decimal places. Round your answers to 2 decimal places.) Show less View journal entry worksheet General Journal / Dotit 00/15 Credit Invertory Accounts payable (euro) 09/15 No journal entry required 09/30 Foreign exchange loss Accounts payable (euro) 09/30 Forward contract Gain on forward contract 10/31 Foreign exchange loss Accounts payable euro) 10/31 Forward contract Gain on forward contract 31 Foreign currency euro Cash Forward contract Accounts payable Foreign trendy Vine Veritas ordered the wine on September 15. The wine arrived and the company paid for it on October 31. On September 15, Vino Veritas entered into a 45 day forward contract to purchase 200.000 euros. The company properly designated the forward contract as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is measured by referring to changes in the forward rate. Prepare journal entries to account for the foreign currency forward contract, firm commitment, and import purchase. (if no entry is required for a transaction/event, select "No journal entry required in the first account field. Round your present value Interest factor to four decimal places. Round your answers to 2 decimal places.) Show less View transaction fist View journal entry worksheet Debit Credit 7 1 0 /15 journal entry quired 00/15 No marry required 09/30 Forward contract Gain on foreign contract 09/30 Loss on foreign contract Fimm comment Forward contract Gain on foreign contract comment Loss on mo Foren duro Forward contract 10/31 Inventory Foreign currency interest factor to four decimal places. Round your answers to 2 decimal places.) Show less View transaction list View journal entry worksheet 1 0 0/15 Debit Credit No journal entry required 09/15 Ne journal entry required 09/30 Forward contract Gain on foreign contract 00:30 Loss on foreign contract Fum commitment 10/31 Forward contract Gain on foreign contra 10/31 Loss on firm comment Firm commitment Foreign currency euro Cash Forward or Inventory Foreign currency 10/31 Ficom. Adjustment incom The wine arrived on September 15, and the company made payment on October 31. On September 15, Vino Veritas purchased a 45-day call option for 200.000 euros. It properly designated the option as a cash flow hedge of a foreign currency payable. Prepare journal entries to account for the import purchase and foreign currency option. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Round your present value interest factor to four decimal places.) Show less View transaction ist View journal entry worksheet - No Date General Journal Debit Credit Invertory Accounts payable (ure) Foreign currency option Cash 0030 Foreign exchange loss Accounts payable (euro) 09/30 Foreign currency option Accumulated other comprehensive income 00:30 Accumulated other comprehensive income an on foreign currency option Option expense Accumulated other comprehensive incon Invertory Foreign currency euro) 10/31 Foreign currency euro) Foreign Acumulated other comorensive income Accumulated other comprehensive income 10/31 Inventory Foreign currency (euro) 10/31 Foreign currency (euro) Accumulated other comprehensive income 1031 Accumulated other comprehensive income Cain on foreign currency option 10:31 Option expense Accumulated other comprehensive income 1031 Foreign currency (euro) Cash Foreign currency option 1031 Accounts payable (euro) Foreign currency Couro) 404 Next here to search O * 404 Next here to search O *