On December 1, Exotic Imports Inc. (EII) ordered a large supply of product from a supplier in Athens, Greece. The currency of Greece is the Euro Dollar (EUR). The total order was EUR 525,000, payable to the supplier 30 days after delivery of the product to Ell's warehouse in Calgary. As per the terms of the contract, title to the product would transfer to EII Imports upon delivery to its warehouse in Calgary (scheduled for January 1). Immediately upon placing the order on December 1, EII entered into a forwarding contract with its bank to purchase EUR 525,000 on January 31, the day that EII expects to pay its supplier. The product was delivered as expected on January 1. EII's controller chose to use hedge accounting for this transaction, designating the hedge as a cash flow hedge of the foreign liability. The company's year-end was December 31. Foreign exchange rates were as follows: Date December 1 December 30 January 1 January 31 Spot Rate 1 EUR = CAD 1.7998 1 EUR = CAD 1.7333 1 EUR = CAD 1.8120 1 EUR = CAD 1.8400 Forward Rate 1 EUR = CAD 1.8250 1 EUR = CAD 1.7475 1 EUR = CAD 1.8350 1 EUR = CAD 1.8400 REQUIRED: Prepare all the journal entries required to record the cash flow hedge on the books of Exotic Imports Inc. (10 Marks) Note: Round all currency amounts to the nearest whole amount (i.e. no decimals). Carry all exchange rates to 4 decimal places (e.g. 0.1234) On December 1, Exotic Imports Inc. (EII) ordered a large supply of product from a supplier in Athens, Greece. The currency of Greece is the Euro Dollar (EUR). The total order was EUR 525,000, payable to the supplier 30 days after delivery of the product to Ell's warehouse in Calgary. As per the terms of the contract, title to the product would transfer to EII Imports upon delivery to its warehouse in Calgary (scheduled for January 1). Immediately upon placing the order on December 1, EII entered into a forwarding contract with its bank to purchase EUR 525,000 on January 31, the day that EII expects to pay its supplier. The product was delivered as expected on January 1. EII's controller chose to use hedge accounting for this transaction, designating the hedge as a cash flow hedge of the foreign liability. The company's year-end was December 31. Foreign exchange rates were as follows: Date December 1 December 30 January 1 January 31 Spot Rate 1 EUR = CAD 1.7998 1 EUR = CAD 1.7333 1 EUR = CAD 1.8120 1 EUR = CAD 1.8400 Forward Rate 1 EUR = CAD 1.8250 1 EUR = CAD 1.7475 1 EUR = CAD 1.8350 1 EUR = CAD 1.8400 REQUIRED: Prepare all the journal entries required to record the cash flow hedge on the books of Exotic Imports Inc. (10 Marks) Note: Round all currency amounts to the nearest whole amount (i.e. no decimals). Carry all exchange rates to 4 decimal places (e.g. 0.1234)