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On Sept 3, 2019, Red Inc. entered into a forward contract to buy 25,000 Rubles (RB) for $ 3,800 Canadian (CAD) on October 5, 2019.

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On Sept 3, 2019, Red Inc. entered into a forward contract to buy 25,000 Rubles (RB) for $ 3,800 Canadian (CAD) on October 5, 2019. On September 30, 2019, 25,000 RB can be purchased for $ 3,500 CAD. On October 5, Red settles the contract but does NOT take delivery of the RB. On October 5, 2019, the RB is trading at $ 0.15 CAD. The entry to record the settlement of the contract is (assuming the value of the Derivative was adjusted at Sept 30 , 2019 month end O 1. Cash ... 450 Derivatives-Financial Assets/Liabilities. 250 Gain or Loss on Derivatives......... . ..... 200 O 2. Derivatives-Financial Assets/Liabilities. . . ... 250 Cash........... ........ 50 Gain or Loss on Derivatives......... 300 O 3. Derivatives-Financial Assets/Liabilities. 300 Cash...... 200 Gain or Loss on Derivatives.. 100 O 4. Derivatives-Financial Assets/Liabilities. 300 Cash....... 50 Gain or Loss on Derivatives.. 250

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