Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please give just journal entries for Req B1 PLEASE ANSWER ASAP THANK YOU Icebreaker Company (a U.S.-based company) sells parts to a foreign customer on
please give just journal entries for Req B1
PLEASE ANSWER ASAP THANK YOU
Icebreaker Company (a U.S.-based company) sells parts to a foreign customer on December 1, 2020, with payment of 32,000 dinars to be received on March 1, 2021. Icebreaker enters into a forward contract on December 1, 2020, to sell 32,000 dinars on March 1, 2021. The forward points on the forward contract are excluded in assessing hedge effectiveness and are amortized to net income using a straight-line method on a monthly basis. Relevant exchange rates for the dinar on various dates are as follows: Date December 1, 2020 December 31, 2020 March 1, 2021 Spot Rate $ 5.00 5.10 5.25 Forward Rate (to March 1, 2021) $ 5.075 5.200 N/A Icebreaker must close its books and prepare financial statements at December 31. Company purchases materials from a foreign supplier on December 1, 2020, with payment of 32,000 dinars to be made on March 1, 2021. The materials are consumed immediately and recognized as cost of goods sold at the date of purchase. On December 1, 2020, Brandlin enters into a forward contract to purchase 32,000 dinars on March 1, 2021. a-1. Assuming that Icebreaker designates the forward contract as a cash flow hedge of a foreign currency payable, prepare journal entries for the import purchase and foreign currency forward contract in U.S. dollars. a-2. What is the impact on 2020 net income? a-3. What is the impact on 2021 net income? a-4. What is the impact on net income over the two accounting periods? Req A1 Req A2 to A4 Req B1 Req B2 to B3 Assuming that Icebreaker designates the forward contract as a fair value hedge of a foreign currency payable, prepare journal entries for the import purchase and foreign currency forward contract in U.S. dollars. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) Show less View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 12 > Record the purchase of materials. Note: Enter debits before credits. Date General Journal Debit Credit 12/01/2020 Icebreaker Company (a U.S.-based company) sells parts to a foreign customer on December 1, 2020, with payment of 32,000 dinars to be received on March 1, 2021. Icebreaker enters into a forward contract on December 1, 2020, to sell 32,000 dinars on March 1, 2021. The forward points on the forward contract are excluded in assessing hedge effectiveness and are amortized to net income using a straight-line method on a monthly basis. Relevant exchange rates for the dinar on various dates are as follows: Date December 1, 2020 December 31, 2020 March 1, 2021 Spot Rate $ 5.00 5.10 5.25 Forward Rate (to March 1, 2021) $ 5.075 5.200 N/A Icebreaker must close its books and prepare financial statements at December 31. Company purchases materials from a foreign supplier on December 1, 2020, with payment of 32,000 dinars to be made on March 1, 2021. The materials are consumed immediately and recognized as cost of goods sold at the date of purchase. On December 1, 2020, Brandlin enters into a forward contract to purchase 32,000 dinars on March 1, 2021. a-1. Assuming that Icebreaker designates the forward contract as a cash flow hedge of a foreign currency payable, prepare journal entries for the import purchase and foreign currency forward contract in U.S. dollars. a-2. What is the impact on 2020 net income? a-3. What is the impact on 2021 net income? a-4. What is the impact on net income over the two accounting periods? Req A1 Req A2 to A4 Req B1 Req B2 to B3 Assuming that Icebreaker designates the forward contract as a fair value hedge of a foreign currency payable, prepare journal entries for the import purchase and foreign currency forward contract in U.S. dollars. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) Show less View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 12 > Record the purchase of materials. Note: Enter debits before credits. Date General Journal Debit Credit 12/01/2020Step by Step Solution
There are 3 Steps involved in it
Step: 1
Req B1 Journal Entries for Fair Value Hedge Journal Entries 1 December 1 2020 Record the purchase of ...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started