Part II Assume that Maple used forward contracts to manage the foreign currency risks of all of its export and import transactions during 20X5. On March 1, 20X5, Maple, anticipating a weaker Canadian dollar on the May 30, 20X5, settlement date, entered into a 90-day forward contract to sell C$30,000 at a forward exchange rate of C$1 = $0.64. The forward contract was not designated as a hedge. On July 1, 20X5, Maple, anticipating a strengthening of the yen on the October 29, 20X5, settlement date, entered into a 120-day forward contract to purchase 500,000 at a forward exchange rate of 1 = $0.105. The forward contract was designated as a fair value hedge of a firm commitment. On November 16, 20X5, Maple, anticipating a strengthening of the pound on the January 15, 20X6, settlement date, entered into a 60-day undesignated forward exchange contract to purchase 10,000 at a forward exchange rate of 1 = $1.67. Required: Prepare journal entries to record Maples foreign currency activities during 20X5 and 20X6. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

a-1

1. Record the entry for the 90-day forward contract signed for the forecasted foreign currency transaction.

Date	General Journal	Debit	Credit
Mar. 1, 20X5

2. Record the revaluation of the foreign currency.

Date	General Journal	Debit	Credit
May. 30, 20X5

3. Record the payment to the exchange broker in accordance with the forward contract.

Date	General Journal	Debit	Credit
May. 30, 20X5

4. Record the receipt of cash from the exchange broker.

Date	General Journal	Debit	Credit
May. 30, 20X5

a-2

1. Record the entry for the 120-day forward contract signed for the forecasted foreign currency transaction.

Date	General Journal	Debit	Credit
Jul. 1, 20X5

2. Record the gain or loss on the financial instrument aspect of the firm commitment.

Date	General Journal	Debit	Credit
Aug. 30, 20X5

3. Record the gain or loss on the financial instrument aspect of the firm commitment.

Date	General Journal	Debit	Credit
Aug. 30, 20X5

4. Record the acquisition of the equipment.

Date	General Journal	Debit	Credit
Aug. 30, 20X5

5. Record the revaluation of the foreign currency.

Date	General Journal	Debit	Credit
Oct. 29, 20X5