Hedging Exercises 1. Suppose that on February 1, 2020, Victoria, Plc., a British company, makes a sale and ships goods to Hamada, LLC, an Emirati customer, for 100,000 (GBP). However, it is agreed that Hamada will pay in dirhams on April 2, 2020. The exchange (spot) rate as of February 1, 2020 is 5 dirhams per Great British Pound. How many dirhams does Hamada agree to pay? Record the entry in Victoria's books. 2. Suppose that on April 2, 2020, the spot rate for dirhams is 5.5 dirhams/GBP. Victoria, PLC. will still receive 500,000 dirhams. How much are they now worth in GBP? Prepare the entries in Victoria's books. 3. Prepare the journal entry to record receipt of payment by Hamada LLC if the spot rate on dirhams was 4.75 dirhams/GBP on April 2, 2020. Add a new discussion topic