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I am looking for help with part b1 only. These are the journal enteries that I have so for that are correct. Thank you. On
I am looking for help with part b1 only. These are the journal enteries that I have so for that are correct. Thank you. On June 1, Alexander Corporation sold goods to a foreign customer at a price of 1,100,000 pesos and will receive payment in three months on September 1. On June 1, Alexander acquired an option to sell 1,100,000 pesos in three months at a strike price of $0.073. Relevant exchange rates and option premiums for the peso are as follows: Tetra Septeemi Date June 1 June 30 September 1 Spot Rate $ 0.073 0.079 0.071 Put Option Premium for September 1 (strike price $0.073) $ 0.0026 0.0021 N/A Alexander must close its books and prepare its second-quarter financial statements on June 30. a-1. Assuming that Alexander designates the foreign currency option as a cash flow hedge of a foreign currency receivable, prepare journal entries for these transactions in U.S. dollars. a-2. What is the impact on net income over the two accounting periods? b-1. Assuming that Alexander designates the foreign currency option as a fair value hedge of a foreign currency receivable, prepare journal entries for these transactions in U.S. dollars. b-2. What is the impact on net income over the two accounting periods? No General Journal Debit Credit Date 06/01 Accounts receivable (P) Sales 06/01 Foreign currency option Cash 06/30 Accounts receivable (P) Foreign exchange gain 00 00 06/30 No Transaction Recorded 06/30 No journal entry required 06/30 No journal entry required 09/01 Foreign exchange loss Accounts receivable (P) 09/01 No Transaction Recorded 09/01 No journal entry required 09/01 No journal entry required 09/01 Foreign currency (P) Accounts receivable (P) 12 09/01 Cash Foreign currency (P) On June 1, Alexander Corporation sold goods to a foreign customer at a price of 1,100,000 pesos and will receive payment in three months on September 1. On June 1, Alexander acquired an option to sell 1,100,000 pesos in three months at a strike price of $0.073. Relevant exchange rates and option premiums for the peso are as follows: Tetra Septeemi Date June 1 June 30 September 1 Spot Rate $ 0.073 0.079 0.071 Put Option Premium for September 1 (strike price $0.073) $ 0.0026 0.0021 N/A Alexander must close its books and prepare its second-quarter financial statements on June 30. a-1. Assuming that Alexander designates the foreign currency option as a cash flow hedge of a foreign currency receivable, prepare journal entries for these transactions in U.S. dollars. a-2. What is the impact on net income over the two accounting periods? b-1. Assuming that Alexander designates the foreign currency option as a fair value hedge of a foreign currency receivable, prepare journal entries for these transactions in U.S. dollars. b-2. What is the impact on net income over the two accounting periods? No General Journal Debit Credit Date 06/01 Accounts receivable (P) Sales 06/01 Foreign currency option Cash 06/30 Accounts receivable (P) Foreign exchange gain 00 00 06/30 No Transaction Recorded 06/30 No journal entry required 06/30 No journal entry required 09/01 Foreign exchange loss Accounts receivable (P) 09/01 No Transaction Recorded 09/01 No journal entry required 09/01 No journal entry required 09/01 Foreign currency (P) Accounts receivable (P) 12 09/01 Cash Foreign currency (P)
I am looking for help with part b1 only. These are the journal enteries that I have so for that are correct. Thank you.
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