On November 1, 2014, Moddel Company (a U.S. corporation) entered into a 90-day forward contract to purchase 200,000 British pounds. The purpose of the forward contract is to hedge a commitment to purchase special equipment on January 30, 2015 from a British firm Jeckyl, Inc. The invoice price on the purchase commitment is denominated in British pounds. The forward contract is not settled net. Assume Moddel uses a 12% interest rate. Use a fair value hedge. The relevant exchange rates are stated in dollars per pound: Forward Rate Spot Rate to Jan. 30, 2012 November 1, 2014 $1.32 $1.35 December 31, 2014 $1.47 $1.50 January 30, 2015 $1.55 - Part 1: What journal entry did Moddel record on November 1, 2014? Part 2: What journal entries did Moddel record on December 31, 2014? Part 3: What journal entries did Moddel record on January 30, 2015 if the purchase was made?

On November 1, 2014, Moddel Company (a U.S. corporation) entered into a 90-day forward contract to purchase 200,000 British pounds. The purpose of the forward contract is to hedge a commitment to purchase special equipment on January 30, 2015 from a British firm Jeckyl, Inc. The invoice price on the purchase commitment is denominated in British pounds. The forward contract is not settled net. Assume Moddel uses a 12% interest rate. Use a fair value hedge. The relevant exchange rates are stated in dollars per pound: Forward Rate to Jan. 30, 2012 $1.35 $1.50 Spot Rate $1.32 $1.47 $1.55 November 1, 2014 December 31, 2014 January 30, 2015 Part 1: What journal entry did Moddel record on November 1, 2014? Part 2: What journal entries did Moddel record on December 31, 2014? Part 3: What journal entries did Moddel record on January 30, 2015 if the purchase was made