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 with all journal entries, including adjusting entries, to record the transaction and the forward contract?
Date. Spot Rate Forward 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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Fundamental Financial Accounting Concepts
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Mark Edmonds, Christopher Edmonds
10th Edition
126015940X, 978-1260159400
