On November 1, 2020 Zamfir Company, a U.S. corporation, purchased minerals from a Russian company for 3,000,000 rubles, payable in 3 months. Zamfir uses the periodic inventory method. The relevant exchange rates between the US and Russian currencies are given Spot rate Forward rate (at February 1, 2021) November 1, 2020 $0.348 $0.350 December 31, 2020 0.359 $0,352 February 1, 2022 0.344 The company's incremental borrowing rate provides a discount rate of 0.995 for one month. Zamfir designates the forward contract as a cash flow hedge of the foreign currency payable, and assesses hedge effectiveness based on changes in forward rates. Spell out account names (accounts payable). Use commas for numbers, but no $ (3,000,000) A. The journal entry to record the purchase of minerals on November 1, 2020 would be Account to debit Accounts Receivable Amount of debit 1,044,000 Account to credit Sales Amount of credit 1,044,000 B. The journal entry to adjust the payable on December 31, 2020, would be Account to debit Amount of debit Account to credit Amount of credit C. The journal entry to adjust the forward contract on December 31, 2020, would be: Account to debit Amount of debit Account to credit Amount of credit D. The journal entry to offset the gain or loss on the foreign currency payable on December 31, 2020, would be: Account to debit Amount of debit Account to credit Amount of credit E. The journal entry to amortize the premium or discount on the forward contract on December 31, 2020, would be: Account to debit Amount of debit Account to credit Amount of credit On November 1, 2020 Zamfir Company, a U.S. corporation, purchased minerals from a Russian company for 3,000,000 rubles, payable in 3 months. Zamfir uses the periodic inventory method. The relevant exchange rates between the US and Russian currencies are given Spot rate Forward rate (at February 1, 2021) November 1, 2020 $0.348 $0.350 December 31, 2020 0.359 $0,352 February 1, 2022 0.344 The company's incremental borrowing rate provides a discount rate of 0.995 for one month. Zamfir designates the forward contract as a cash flow hedge of the foreign currency payable, and assesses hedge effectiveness based on changes in forward rates. Spell out account names (accounts payable). Use commas for numbers, but no $ (3,000,000) A. The journal entry to record the purchase of minerals on November 1, 2020 would be Account to debit Accounts Receivable Amount of debit 1,044,000 Account to credit Sales Amount of credit 1,044,000 B. The journal entry to adjust the payable on December 31, 2020, would be Account to debit Amount of debit Account to credit Amount of credit C. The journal entry to adjust the forward contract on December 31, 2020, would be: Account to debit Amount of debit Account to credit Amount of credit D. The journal entry to offset the gain or loss on the foreign currency payable on December 31, 2020, would be: Account to debit Amount of debit Account to credit Amount of credit E. The journal entry to amortize the premium or discount on the forward contract on December 31, 2020, would be: Account to debit Amount of debit Account to credit Amount of credit
