On December 1, 2018, a PH firm purchased 100 units of inventory from a French firm for 500,000 euros to be paid on March 1, 2019. The firm's fiscal year-end is December 31. Assume further that the U.S. firm did not engage in any form of hedging activity. The spot rate for euros (P/euro) at various times is as follows:

Spot Rate

Transaction date - December 1, 2018 P1.05

Balance sheet date - December 31, 2018 1.08

Settlement date - March 1, 2019 1.07

Prepare journal entries to record the transactions above