question cis clearly stated

Exercise 2.2 A Zorba Company, a US-based importer of specialty olive oil, placed olive oil at a price of 100 euro per case. The total purchase price is 30, Date Spot rate December 1, Year 1 $1 $1.08 December 31, Year 1 1.1 1.17 January 31, Year 2 1.15 1.15 Zorba Company has an incremental borrowing rate of 12 percent (1 per and prepares financial statements on December 31. The present value Tacto interest rate of 12% is 0.9901. ve oil, placed an order with a foreign supplier for 500 cases of urchase price is 50.000 euro. Relevant exchange rates are as follows: Forward Rate (to January 31, Y2) percent (1 percent per month) and closes the books ne present value factor for one month at an annual Required: Assume the olive oil was received on December 1, Y1 and paymen received on December 1, Y1 and payment was made on January 31, Y2. On December 1 Y1, Zorba Company entered into a two-month forward contract to purchase 50,000 euros The Torward contract is properly designated as a fair value hedge of foreign currency payable Prepare journal entries to account for import purchase and foreign currency forward con Forward Contract Fair Value Hedge of a Recognized Foreign Currency Liability Date Spot Accounts Payable (FC) Forward Forward Contract Rate US$ value Change in Rate to Fair Value Change in US$ value Jan 31/42 Fair Value