Q5. Reecom Corp. (a US-based company) sold parts to a Malaysian customer on December 1, 2015, with payment of MYR 1,500,000 (Malaysian Ringgit) to be received on March 31, 2016. The following exchange rates apply

Date	Spot Rate	Forward Rate ( to March 31, 2017)
December 1, 2015...	$0.23	$0.225
December 31, 2015.	$0.22	$0.215
March 31, 2016..	$0.21

Reecoms incremental borrowing rate is 12 percent. The present value factor for three months at an annual interest rate of 12 (1 percent per month) is 0.9706.

Required: make tables in order to record the journal entries as shown below

1. Assuming no forward contract was entered into;
   1. Record the sales (in USD) on December 1, 2015 and the foreign exchange gain or loss on December 31, 2015.

Date	Account	Debit	Credit
Dec 1, 2015
Dec 31, 2015

2. Record the receivable collection and, if, an additional foreign exchange gain or loss on March 31, 2016.

Date	Account	Debit	Credit
Mac 31, 2015

2. Assuming a forward contract to sell MYR 1,500,000 was entered into on December 1, 2015 as a fair value hedge of a foreign currency receivable;
   1. Record the transaction (in USD) on December 31, 2015 to adjust the value of accounts receivable and to record foreign currency as an asset or liabilities.

Date	Account	Debit	Credit
Dec 31, 2015

2. Record the transaction (in USD) on March 31, 2016 to adjust the value of accounts and to record foreign currency as an asset of liabilities.

Date	Account	Debit	Credit
Mac 31, 2015
Mac 31, 2015

3. Record the receipt of 1,500,000 MYR as an asset and to record the settlement on March 31, 2016

Date	Account	Debit	Credit
Mac 31, 2015
Mac 31, 2015