Question 3 (25 marks) Chrysler Exporters Inc., a US wholesaler is engaged in foreign trade. The following transactions were recorded: 1. On December 1, 2020, Chrysler Exporters Inc., purchased merchandise from Chang's Ltda Japanese manufacturer. The invoice was for X500,000, payable on April 1, 2021. II. On the same day, Chrysler Exporters Inc. accepted a forward exchange contract (forward contract) to buy 500,000 on April 1, 2021. 2 III. IV. On April 1, 2021, the Y500,000 was delivered on the contract and the supplier was settled. The spot rates and the forward rates were as follows: Date Spot rate Forward rate for delivery () on April 1, 2021 December 1, 2020 $0.0084 $0.0089 December 31, 2020 0.0083 0.0088 April 1, 2021 0.0092 Require: a. Prepare journal entries for the purchase transaction held on December 1, 2020. (4 marks) b. Prepare the forward contract transaction entered into on December 1, 2020. (4 marks) c. Prepare the journal entries to track the accounts payable and the forward contract on December 31, 2020, for Chrysler Exporters Inc, financial statements. (8 marks) d. Prepare the journal entries for the settlement of the contracts on April 1, 2021. (7 marks) e. What is the value of the forward contract? (2 marks)