Merit & Family purchased engines from Canada for 20,000 Canadian dollars on March 10 with payment due on June 8. Also, on March 10, Merit acquired a 90-day forward contract to purchase 20,000 Canadian dollars at C$1 = $0.50. The forward contract was acquired to manage Merit & Familys exposed net liability position in Canadian dollars, but it was not designated as a hedge. The spot rates were

March 10	C$1	=	$	0.49
June 8	C$1	=	$	0.52

Required: Prepare journal entries for Merit & Family to record the purchase of the engines, entries associated with the forward contract, and entries for the payment of the foreign currency payable.

1. Record the foreign purchase of the engines.

2. Record the entry for the 90-day forward exchange contract signed to receive Canadian dollars.

3. Record the entry to revalue the foreign currency receivable to the current equivalent U.S. dollar value.

4. Record the entry to revalue the foreign currency accounts payable to the current U.S. dollar value.

5. Record the payment of U.S. dollars to an exchange broker for the forward contract.

6. Record the receipt of Canadian dollars from the exchange broker.

7. Record the settlement of the foreign currency payable.