Exercise 1 On December 1, 2021, a U.S. firm contracts to sell equipment (with an asking price of 2,000,000 pesos) in Mexico. The firm will take delivery and will pay for the equipment on April 1, 2022 On December 1, 2021, the company enters into a forward contract to sell 2,000,000 pesos for $0.0950 on April 1, 2022. Spot rates and the forward rates for April 1, 2022, settlement were as follows (dollars per peso): Spot Rate Forward Rate December 1, 2021 $0.0954 $0.0950 Balance sheet date (12/31/21) 0.0949 0.0960 April 1, 2022 0.0955 On April 1, 2022, the equipment was sold for 2,000,000 pesos. The cost of the equipment was $80,000. Required: Prepare all journal entries needed on December 1, December 31, and April 1 to account for the forward contract, the firm commitment, and the transaction to sell the equipment