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I cannot determine the equation to solve for part 10 premium expense Brandlin Company of Anaheim, California, purchases materials from a foreign supplier on December

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I cannot determine the equation to solve for part 10 premium expense

Brandlin Company of Anaheim, California, purchases materials from a foreign supplier on December 1, 2017, with payment of 14,000 korunas to be made on March 1, 2018. The materials are consumed immediately and recognized as cost of goods sold at the date of purchase. On December 1, 2017, Brandlin enters into a forward contract to purchase 14,000 korunas on March 1, 2018. Relevant exchange rates for the koruna on various dates are as follows: Date December 1, 2017 December 31, 2017 March 1, 2018 Spot Rate $ 3.20 3.30 3.45 Forward Rate (to March 1, 2018) $ 3.275 3.400 N/A Brandlin's incremental borrowing rate is 12 percent. The present value factor for two months at an annual interest rate of 12 percent (1 percent per month) is 0.9803. Brandlin must close its books and prepare financial statements at December 31. a-1. Assuming that Brandlin designates the forward contract as a cash flow hedge of a foreign currency payable and recognizes any premium or discount using the straight-line method, prepare journal entries for these transactions in U.S. dollars. Shov No Date General Journal Debit Credit 1 12/01/2017 44,800.00 Cost of goods sold Accounts payable (K) 44,800.00 2 12/01/2017 No journal entry required > 3 12/31/2017 1,400.00 Foreign exchange loss Accounts payable (K) 1,400.00 4 12/31/2017 1,715.53 Forward contract Accumulated other comprehensive income 1,715.53 5 12/31/2017 Accumulated other comprehensive income 1,400.00 Gain on forward contract 1,400.00 6 12/31/2017 350.00 Premium expense Accumulated other comprehensive income 350.00 7 03/01/2018 2,100.00 Foreign exchange loss Accounts payable (K) 2,100.00 8 03/01/2018 734.47 Forward contract Accumulated other comprehensive income 734.47 > 9 03/01/2018 2,100.00 Accumulated other comprehensive income Gain on forward contract 2,100.00 10 03/01/2018 722.98 Premium expense Accumulated other comprehensive income 722.98 x 11 03/01/2018 Foreign currency (K) Forward contract 12 03/01/2018 734.00 Accounts payable (K) Foreign currency (K)

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