Constellation Brands, a U.S. company, purchases merchandise from a German supplier on a regular basis. On April 1, 2016, Constellation purchased 21,000 for delivery on June 30, 2016, in anticipation of an expected purchase of merchandise for 21,000 at the end of June. The forward contract was a qualified hedge of a forecasted transaction. Constellation took delivery of the merchandise, settled the forward contract, and paid the German supplier 21,000 on June 30, 2016. The merchandise was subsequently sold in the U.S. on July 12, 2016, for $28,500 in cash. Relevant exchange rates ($/) are as follows: Spot rate Forward rate for delivery June 30, 2016 April 1, 2016 $ 1.33 $1.31 June 30, 2016 1.37 -- Prepare the journal entries made by Constellation Brands on June 30 and July 12 concerning the above events. Assume Constellation Brands is a calendar-year company, and records cost of goods sold at the time of sale. General Journal Date Description Debit Credit 06/30/16 Answer Investment in forward contract Answer 0 Answer 0 Answer Other comprehensive income Answer 0 Answer 0 To record increase in fair value of forward contract. Answer Foreign currency Answer 0 Answer 0 Investment in forward contract Answer 0 Answer 0 Answer Cash Answer 0 Answer 0 To record settlement of forward contract. Answer Inventory Answer 0 Answer 0 Answer Foreign currency Answer 0 Answer 0 To record delivery of merchandise and payment to supplier. 07/12/16 Answer Cash Correct Mark 1.00 out of 1.00 Answer 0 Answer 0 Answer Sales revenue Answer 0 Answer 0 To record merchandise sale. Other comprehensive income Answer 0 Answer 0 Answer Cost of goods sold Answer 0 Answer 0 Answer Inventory Answer 0 Answer 0 To record cost of sale.