Question
On November 1, 2014, Ross Corporation, a calendar-year U.S. corporation, invested in a purely speculative contract to purchase 1 million euros on January 30, 2015,
On November 1, 2014, Ross Corporation, a calendar-year U.S. corporation, invested in a purely speculative contract to purchase 1 million euros on January 30, 2015, from Trattoria Company, an Italian brokerage firm. Ross agreed to purchase 1,000,000 euros from Trattoria at a fixed price of $1.420 per euro. Trattoria agreed to transmit 1,000,000 euros to Ross on January 30, 2015. Net settlement is not permitted. The spot rates for euros are: Nov 01, 2014 1 euro = $1.415 Dec 31, 2014 1 euro = $1.395 Jan 30, 2015 1 euro = $1.410 The 30-day futures rate for euros on December 31, 2014 was $1.405. Required: Prepare the General Journal entries that Ross would record on November 1, December 31, and January 30.
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