Question
On June 1 Hammer Company purchased inventory from a foreign supplier at a price of 75,000 FCU (FCU is foreign currency units) Hammer will make
On June 1 Hammer Company purchased inventory from a foreign supplier at a price of 75,000 FCU (FCU is "foreign currency units")
Hammer will make payment in three months on September 1.
On June 1, Hammer entered into a forward contract maturing on September 1 as a fair value hedge of its FCU lliability.
hELP all journal entries, including adjusting entries, to record the transaction and the forward contract.
DateSpot rateForward rate*
June 1$0.80$0.85
June 30$0.83$0.84
Sept. 1$0.86
*Forward rate is for a contract written on June 1 to mature on September 1. (Disregard the impact of any interest factor or discount rate.)
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Governmental And Nonprofit Accounting Theory And Practice
Authors: Robert J Freeman, Craig D Shoulders, Gregory S Allison, Terry K Patton, Robert Smith,
9th Edition
0132552728, 9780132552721
