On December 1, 20X1, Micro World Inc. entered into a 120-day forward contract to purchase 110,000 Australian dollars (A$). Micro Worlds fiscal year ends on December 31. The direct exchange rates follow:

Date	Spot Rate				Forward Rate for March 31, 20X2
December 1, 20X1		$	0.600			$	0.609
December 31, 20X1			0.610				0.612
January 30, 20X2			0.608				0.605
March 31, 20X2			0.602

Required: Prepare all journal entries for Micro World Inc. for the following independent situations:

a. The forward contract was to manage the foreign currency risks from the purchase of furniture for A$110,000 on December 1, 20X1, with payment due on March 31, 20X2. The forward contract is not designated as a hedge.

b. The forward contract was to hedge a firm commitment agreement made on December 1, 20X1, to purchase furniture on January 30, with payment due on March 31, 20X2. The derivative is designated as a fair value hedge.

c. The forward contract was to hedge an anticipated purchase of furniture on January 30. The purchase took place on January 30 with payment due on March 31, 20X2. The derivative is designated as a cash flow hedge. The company uses the forward exchange rate to measure hedge effectiveness.

d. The forward contract was for speculative purposes only.

e. Assume that interest is significant and the time value of money is considered in valuing the forward contract. Use a 12 percent annual interest rate. Prepare all journal entries required if, as in requirement (a), the forward contract was to manage the foreign currencydenominated payable from the purchase of furniture for 110,000 Australian dollars on December 1, 20X1, with payment due on March 31, 20X2.