Journal entries for hedging an unrecognized foreign currency firm commitment for two situations.

ACT506 Portfolio Project Option #1 Journal Entries for Hedging two Unrecognized Foreign Currency Firm Commitments: A Foreign Currency Fair Value Hedge Information: First Transaction: (CAN$$) 1). 2). 3). 4). On Sept 01, 20x7, Push Corp orders inventory items A from Canadian Corporation Within 60 days, the delivery of the Canadian inventory parts will take place, Nov The contract price is Canadian ($) 10,000 to be paid in 180 days, 6 months. May 0 On Sept 01, 20x7, Push Corporation hedges its foreign currency payable commitm Second Transaction: (YEN) 1). 2). 3). 4). On Nov 01, 20x7, Push Corporation orders inventory items B from Japan Corpora Within 30 days, the delivery of the Japan inventory parts will take place, Dec 01, The contract price is Japan Yen (Y) 10,000 to be paid with 90 days, 3 months after On Nov 01, 20x7 Push Corporation hedges its foreign currency payable commitm 6). Relevant exchange Rates - Canadian ($) 9/1/20x7 10/1/20x7 11/1/20x7 12/1/20x7 12/31/20x7 1/1/20x8 2/1/20x8 3/1/20x8 4/1/20x8 5/1/20x8 7). Spot Rate 1 1.05 1.15 1.15 1.2 1.25 1.15 1.05 1.05 1.05 Forward Exchange Rate 1.1 1.15 1.2 1.2 1.35 1.3 1.25 1.1 1.15 0 Relevant exchange Rates - Japan (Y) 9/1/20x7 10/1/20x7 11/1/20x7 12/1/20x7 12/31/20x7 1/1/20x8 2/1/20x8 3/1/20x8 4/1/20x8 Spot Rate 1 0.95 0.9 0.9 0.85 0.9 0.9 0.95 1 Forward Exchange Rate 1.05 1 0.95 0.95 0.9 0.95 0.95 1 1.05 5/1/20x8 Requirement: you are to complete on the next Tab each box shown and shaded in yellow color. Each cell requiring a number or calculation in it, you should use Excel functions to calculate the answer for that Cell. Please do not enter directly the answer to any Cell requiring a number-you must use Excel functions or your grade will be reduced on this Assignment. 0.9 0 ncy Fair Value Hedge rom Canadian Corporation. parts will take place, Nov 1, 20x7. 180 days, 6 months. May 01, 20xx currency payable commitment with a forward exchange contract to receive Canadian $ for 10,000 in 240 days (60+180). ems B from Japan Corporation. ts will take place, Dec 01, 20x7. th 90 days, 3 months after delivery. March 01, 20xx urrency payable commitment with a forward exchange contract to receive Japan (Y) 10,000 in 120 days (30 + 90). Forward Exchange Rate Forward Exchange Rate ACT506 Portfolio Project Option #1 Journal Entries for Hedging an Unrecognized Foreign Currency Firm commitment: A Foreign Currency Fair Value Hedge Transactions A Journal Entries: A 9/1/20x7 Foreign Currency Receivable from Exchange Broker Dollars Payable to Exchange Broker($) (Record signed forward exchange contract for receipt of 10,000 CAN $$ in 210 days) B. 11/1/20x7 Foreign Currency Receivable from Exchange Broker Foreign Currency Transaction Gain (Record adjustment of forward contract to fair Value) C. 11/1/20x7 Foreign Currency Transaction loss Firm Commitment (Record the Currency Loss and Commitment) 11/1/20x7 Inventory Firm Commitment Accounts Payable (Euro) (Record Inventory Receipt) 12/31/20x7 Foreign Currency Receivable (EURO) Foreign Currency Gain (Record 12/31 Fair Market Value) 12/31/20x7 Foreign Currency Loss Accounts Payable (Record 12/31 Spot Fair Market Value) 5/1/20x8 Foreign Currency loss Foreign Currency Receivable (Record Fair Market Value on May 1, 2018) Accts Payable Foreign Currency Gain 5/1/20x8 Dollars Payable to Broker Cash Foreign Currency Units Foreign Currency Rec Acct Payable Foreign Currency Units (Record all three end of transactions entries) Currency Fair Value Hedge Debit CAN $$ in 210 days) Credit Portfolio Project Option# 1 Japanese (YEN) Journal entries for hedging an unrecognized Foreign Currency Firm commitment: A Foreign Currency Fair Value Hedge Transactions B Journal Entries: A 11/1/20x7 Foreign Currency Receivable from Exchange Broker Dollars Payable to Exchange Broker($) (Record signed forward exchange contract for receipt of 10,000 Japan YEN in 120 days) B. 12/1/20x7 Foreign Currency Receivable from Exchange Broker Foreign Currency Transaction Gain (Record adjustment of forward contract to fair Value) C. 12/1/20x7 Foreign Currency Transaction loss Firm Commitment (Record Foreign Currency and Commitment) 12/1/20x7 Inventory Firm Commitment Accounts Payable (YEN) ( Record inventory receipt) 12/31/20x7 Foreign Currency loss (YEN) Foreign Currency Receivable 12/31/20x7 Accounts Payable Foreign Currency Gain (Record Fair Market Value and Spot rate) 3/1/20x8 Foreign Currency Receivable Foreign Currency Gain Foreign Currency loss Accts Payable 3/1/20x8 Dollars Payable to Broker Cash Foreign Currency Units Foreign Currency Rec Acct Payable Foreign Currency Units (Record all end of transactions on Books) n Currency Fair Value Hedge of 10,000 Japan YEN in 120 days) Debit Credit