Question Three (9 marks) 1. On December 1, 2021, a US firm contracts to purchase inventory from a foreign customer located in UK for 200,000. The inventory is expected to be delivered on April 1, 2022, and the settlement will be also on April 1, 2022. 2. On December 1, 2021, the US firms enters a forward contract to purchase 200,000 at the forward rate of $1.066. 3. Spot and forward rates for British pound on selected dates are: Spot rate Forward rates December 1, 2021 1-$1,063 1-$1.066 December 31, 2021 1-$1.068 1-$1.067 April 1, 2022 1-$1.065 1-$1.065 Instructions: Prepare the journal entries required to record the transactions in the US firm. Answer