P 13-1 Journal entries and adjusting entries of foreign currency commitment

Sean, Inc., a retailer based in the United States, entered into a forward contract with 250,000, payable in 90 days to Queen NV in the Netherlands to hedge its, purchase transaction on November 1, 2014. The 90-day forward contract allowed net settlement. Assume a 12 percent interest rate annually.

Selected exchange rates for the euro are as follows:

Spot rate 90-day forward rate 30-day forward rate

Nov 1, 2014

$0.78 $0.75

Dec 31, 2014

$0.80 $0.79

Jan 30, 2015

$0.82

R E Q U I R E D : Prepare all journal entries and adjusting entries to account for the transaction above.

P 13-1 Journal entries and adjusting entries of foreign currency commitment Sean, Inc., a retailer based in the United States, entered into a forward contract with 250,000, payable in 90 days to Queen NV in the Netherlands to hedge its, purchase transaction on November 1, 2014. The 90-day forward contract allowed net settlement. Assume a 12 percent interest rate annually. Selected exchange rates for the euro are as follows: Nov 1, 2014 Dec 31, 2014 Jan 30, 2015 $0.78 $0.75 $0.80 Spot rate 90-day forward rate 30-day forward rate $0.82 $0.79 REQUIRED: Prepare all journal entries and adjusting entries to account for the transaction above