On December 1, 2014, Tuscano Corp. entered into a transaction to import raw materials from a foreign company. The account is to be settled on February 1 with the payment of 60,000 foreign currency units (FCU). On December 1, Tuscano also entered into a forward contract to hedge the exposed position resulting from the import transaction. The forward rate is $.71 per unit of foreign currency. Tuscano Corp. has a December 31 fiscal year-end. Spot rates and the forward rates on relevant dates were:

Spot Rate per Unit Forward Rate Date of Foreign Currency (Feb. 1 Settlement) December 1 $.69 $.71 December 31 .72 .715 February 1 .73 .73 Required: Use the data given to select the best answer to each question.

2. The entry to record the forward contract is

(a) Dollars Receivable 41,400 FCU Payable 41,400

(b) FCU Receivable 41,400 Dollars Receivable 41,400

(c) Dollars Receivable 42,600 FCU Payable 42,600

(d) FCU Receivable 42,600 Dollars Payable 42,600

(e) None of the above