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Pumped Up Company purchased equipment from Switzerland for 146,000 francs on December 16, 20X7, with payment due on February 14, 20X8. On December 16, 20X7, Pumped Up also acquired a 60-day forward contract to purchase francs at a forward rate of SFr1= $0.45. On December 31, 20X7, the forward rate for an exchange on February 14, 20X8, is SFr 1 = $0.475. The spot rates were December 16, 2007 December 31, 2007 February 14, 20x8 Ser 1 SFr 1 SFr 1 = $ 0.46 0.48 0.47 Part 1: Assume that the forward contract is not designated as a hedge but is entered into to manage the company's foreign currency- exposed accounts payable. a. Prepare journal entries for Pumped Up to record the purchase of equipment, all entries associated with the forward contract; the adjusting entries on December 31, 20X7, and entries to record the revaluations and payment on February 14, 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 9 > Record the purchase of the equipment with a payable denominated in Swiss francs. Note: Enter debits before credits. Date General Journal Debit Credit Dec. 16, 20X7 Part 1: Assume that the forward contract is not designated as a hedge but is entered into to manage the company's foreign currency- exposed accounts payable. a. Prepare journal entries for Pumped Up to record the purchase of equipment; all entries associated with the forward contract; the adjusting entries on December 31, 20X7, and entries to record the revaluations and payment on February 14, 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the purchase of the equipment with a payable denominated in Swiss francs. Note: Enter debits before credits. Date General Journal Debit Credit Dec. 16, 20X7 Record entry Clear entry View general journal b. What was the effect of the foreign currency transactions on the income statement, including both the accounts payable and the forward contract for the year ended December 31, 20X7?