Hedging Exposed Asset Position with Adjusting Entries
On November 3, 2020, Robin Franchises, a U.S. company, sold merchandise to a franchisee in the U.K., at a price of 8,000,000, payable in three months in pounds. To hedge its exposed asset position, on November 3, 2020, Robin entered a forward contract for delivery of 8,000,000 to the broker on February 3, 2021. On February 3, 2021, Robin received payment from the franchisee, and delivered the pounds to the broker to close the forward contract. Robins accounting year ends December 31. Exchange rates ($/) are as follows:
	Spot rate	Forward rate for delivery February 3, 2021
November 3, 2020	$1.32	$1.32
December 31, 2020	1.3164	1.3163
February 3, 2021	1.3162	--
a. Prepare the journal entries Robin Franchises made on November 3, 2020 and February 3, 2021, as well as the required end of year adjusting entry.
General Journal
Date	Description	Debit	Credit
11/03/20	A/R OR Sales Rev OR Loss OR Invest in Forward COntract OR Gain OR Forgien CUrrency OR CASH	?	?
	A/R OR Sales Rev OR Loss OR Invest in Forward COntract OR Gain OR Forgien CUrrency OR CASH	?	?
	To record sale to franchisee.
12/31/20	A/R OR Sales Rev OR Loss OR Invest in Forward COntract OR Gain OR Forgien CUrrency OR CASH	?	?
	A/R OR Sales Rev OR Loss OR Invest in Forward COntract OR Gain OR Forgien CUrrency OR CASH	?	?
	to restate the receivable
	A/R OR Sales Rev OR Loss OR Invest in Forward COntract OR Gain OR Forgien CUrrency OR CASH	?	?
	A/R OR Sales Rev OR Loss OR Invest in Forward COntract OR Gain OR Forgien CUrrency OR CASH	?	?
	To restate the forward contract
02/03/21	A/R OR Sales Rev OR Loss OR Invest in Forward COntract OR Gain OR Forgien CUrrency OR CASH	?	?
	A/R OR Sales Rev OR Loss OR Invest in Forward COntract OR Gain OR Forgien CUrrency OR CASH	?	?
	to restate the receivable
	A/R OR Sales Rev OR Loss OR Invest in Forward COntract OR Gain OR Forgien CUrrency OR CASH	?	?
	A/R OR Sales Rev OR Loss OR Invest in Forward COntract OR Gain OR Forgien CUrrency OR CASH	?	?
	To restate the forward sale contract.
	A/R OR Sales Rev OR Loss OR Invest in Forward COntract OR Gain OR Forgien CUrrency OR CASH	?	?
	A/R OR Sales Rev OR Loss OR Invest in Forward COntract OR Gain OR Forgien CUrrency OR CASH	?	?
	To record receipt of payment from franchisee.
	A/R OR Sales Rev OR Loss OR Invest in Forward COntract OR Gain OR Forgien CUrrency OR CASH	?	?
	A/R OR Sales Rev OR Loss OR Invest in Forward COntract OR Gain OR Forgien CUrrency OR CASH	?	?
	Foreign currency	?	?
	To record settlement of the forward sale contract.
Calculate the cash gain or loss realized by Robin Franchises by hedging compared with not hedging.
	?	LOSS OR GAIN