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PROBLEMI (30 POINTS) On November 1, 2020, Americo, Corporation sold wine on credit to Venezia Company for 650,000. Payment is not due for 120 days. Thus, the transaction will be settled on February 28, 2021. On November 1, 2020, Americo, Corporation also entered a 120-day forward contract to sell 650,000. The forward contract is not designated as a hedge. The direct exchange rates were as follows: 11/1/2020 $ 12/31/2020 $ 2/28/2021 $ SPOT FORWARD 1.06 $ 1.11 (120 days) 1.13 $ 1.14 (60 days) 1.07 REQUIRED: Prepare the required information below for both the original (underlying) transaction and the related forward contract. IN ORDER TO GET FULL CREDIT FOR YOUR ANSWERS, PLEASE BE SURE TO CLEARLY SHOW ALL OF YOUR WORK. JOURNAL ENTRIES ON NOVEMBER 1, 2020 (TRANSACTION DATE: (4 POINTS) Foreign Currency Transaction Forward Contract YEAR-END OF DECEMBER 31, 2020: JOURNAL ENTRIES: (6 POINTS) Foreign Currency Transaction Forward Contract FINANCIAL STATEMENT PRESENTATION (10 POINTS) INCOME STATEMENT BALANCE SHEET Forward Contract JOURNAL ENTRIES ON FEBRUARY 28, 2021 (SETTLEMENT DATE): (10 POINTS) Foreign Currency Transaction PROBLEM II (30 POINTS) On November 1, 2020, Americo, Corporation purchased wine on credit from Venezia Company for 650,000. Payment is not due for 120 days. Thus, the transaction will be settled on February 28, 2021. On November 1, 2020, Americo, Corporation also entered a 120-day forward contract to purchase 650,000. The forward contract is not designated as a hedge. The direct exchange rates were as follows: 11/1/2020 $ 12/31/2020 $ 2/28/2021 $ SPOT FORWARD 1.06 $ 1.11 (120 days) 1.13 $ 1.14 (60 days) 1.07 REQUIRED: Prepare the required information below for both the original (underlying) transaction and the related forward contract. IN ORDER TO GET FULL CREDIT FOR YOUR ANSWERS, PLEASE BE SURE TO CLEARLY SHOW ALL OF YOUR WORK. JOURNAL ENTRIES ON NOVEMBER 1, 2020 (TRANSACTION DATE): (4 POINTS) Foreign Currency Transaction Forward Contract YEAR-END OF DECEMBER 31, 2020: JOURNAL ENTRIES: 6 POINTS) Foreign Currency Transaction Forward Contract FINANCIAL STATEMENT PRESENTATION 10 POINTS) INCOME STATEMENT BALANCE SHEET JOURNAL ENTRIES ON FEBRUARY 28, 2021 (SETTLEMENT DATE): (10 POINTS) Foreign Currency Transaction Forward Contract