Company A has a December 31^st year-end. Two years ago, when it was considering expansion into a foreign country, it purchased land costing $470,000. At that time the exchange rate was dollar= $1.36CDN. Tranchant planned to build a factory on the land and spent $25,000CDN on surveys and other work required to prepare the land for the building. Subsequently, Tranchant abandoned its plans because of increasing political unrest in the foreign country in which the land is located.

On November 1^st, 2021, company A paid $25,000 for an option to sell the land. Under the option agreement, the selling price ranged from 560,000 to $620,000 and the final selling price was based on the rate of inflation in the foreign country on January 1^st, 2022. The date specified in the option for the sale of the land was January 31, 2022.

Company A planned to exercise its option to sell the land and became increasingly concerned about the U.S -exchange rate. As a consequence, on December 1^st, 2021, it entered into a forward contract to sell $620,000 forward on January 31^st, 2022.

On January 1, 2022, based on the rate of inflation, the final selling price for the land was established at $570,000. On January 31, 2022, Company A exercised its option to sell the land and transferred title to the foreign customer at that time in exchange for $570,000.

Exchange rates:

Spot Rates

November 1^st, 2021 $1 US = $1.40CDN

December 1^st, 2021 $1 US = $1.38CDN

December 31^st, 2022 $1US= $1.32CDN

January 31^st, 2022 $1US = $1.31CDN

Forward Rates

December 1^st, 2021 2 month forward rate 1FCU = $1.35CDN

December 31^st, 2021 2 month forward rate 1FCU = $1.30CDN

December 31^st, 2021 1 month FOrward rate 1FCU = $1.33CDN

Required:

Company A reports under IFRS and has elected to use hedge accounting. Prepare all journal entries necessary to account for these transactions

Clearly date your journal entries and show all calculations. There is no need to provide explanations for your entries.