(Foreign Currency Transaction)

On 10/17/2017, a U.S. company (which has a 12/31 year-end) took delivery from a Canadian firm of inventory costing C$500,000. Payment is due in 90 days. Concurrently the company entered into a forward contract to buy C$500,000 in 90 days at 1 C$ = $1.05. Direct exchange rates for C$ on the respective dates are as follows:

Date	Spot Rate	Forward Rate (Delivery on 1/15/18)
10/17/2017	1.04	1.05
12/31/2017	1.08	1.07
1/15/2018	1.01

Required: Prepare all entries related to this transaction, assuming that the payment was made on 1/15/18.