Hanson Imports, Inc. enters into a contract to buy coffee from Buchannon Inc, an Indonesian company, for 420 Indonesain Rupiahs on July 19, 2018. The coffee will be delivered on November 4, 2018. Hanson Imports, Inc. hedges its purchase commitment on July 19, 2018 by entering into a contract with an exchange broker to receive 420 Indonesain Rupiahs on January 29, 2019, the date the payable will be settled with Buchannon Inc. On Novernber 4h, the coffee is received. On January 129, 2019 the contracts are settled. Exchange rates for Indonesain Rupiah are as follows: Dates July 19, 2018 November 4, 2018 December 31, 2018 January 29, 2019 Spot Rate $1,337.53 $1,329.64 $1,507.10 $1,589.11 Forward rate $1,484.25 $1,408.75 $1,423.80 $1,589.11 Hanson Imports, Inc. sells the coffee it purchased above to Tannon Company of Andorra for 837,000 Euros on November 23, 2018. Payment is due on January 22, 2019. Concurrent with the sale, Hanson Imports, Inc. enters into a forward contract to deliver 837,000 euros to its exchange broker in 60 days. Hanson Imports, Inc.'s fiscal year end is December 31". Exchange rates for euro are as follows: November 23, 2018 December 31, 2018 January 22, 2019 Spot rate 50.728782 50.730025 $0.734891 12/31/18 futures rate $0.732261 60 day futures rate $0.731367 $0.732299 0.733442 REQUIRED: Prepare all journal entries that need to be recorded for the above events. Assume that ed for the above events. Assume that the purchase commitment is a foreign currency fair value hedge, and the sale is not designated as a hedge. Hanson Imports, Inc. enters into a contract to buy coffee from Buchannon Inc, an Indonesian company, for 420 Indonesain Rupiahs on July 19, 2018. The coffee will be delivered on November 4, 2018. Hanson Imports, Inc. hedges its purchase commitment on July 19, 2018 by entering into a contract with an exchange broker to receive 420 Indonesain Rupiahs on January 29, 2019, the date the payable will be settled with Buchannon Inc. On Novernber 4h, the coffee is received. On January 129, 2019 the contracts are settled. Exchange rates for Indonesain Rupiah are as follows: Dates July 19, 2018 November 4, 2018 December 31, 2018 January 29, 2019 Spot Rate $1,337.53 $1,329.64 $1,507.10 $1,589.11 Forward rate $1,484.25 $1,408.75 $1,423.80 $1,589.11 Hanson Imports, Inc. sells the coffee it purchased above to Tannon Company of Andorra for 837,000 Euros on November 23, 2018. Payment is due on January 22, 2019. Concurrent with the sale, Hanson Imports, Inc. enters into a forward contract to deliver 837,000 euros to its exchange broker in 60 days. Hanson Imports, Inc.'s fiscal year end is December 31". Exchange rates for euro are as follows: November 23, 2018 December 31, 2018 January 22, 2019 Spot rate 50.728782 50.730025 $0.734891 12/31/18 futures rate $0.732261 60 day futures rate $0.731367 $0.732299 0.733442 REQUIRED: Prepare all journal entries that need to be recorded for the above events. Assume that ed for the above events. Assume that the purchase commitment is a foreign currency fair value hedge, and the sale is not designated as a hedge
