Req A1
1. Record the sales and foreign currency account receivable. date: 12.01.2020
2. Record the forward contract. date: 12.01.2020
3. Record the entry to revalue the foreign currency account receivable. date: 12.31.2020
4.Record the change in the fair value of the forward contract. date: 12.31.2020
5. Record the foreign exchange gain or loss on the forward contract. date: 12.01.2020
6. Record the amortization of the forward contract premium or discount. date: 12.01.2020
7. Record the entry to revalue the foreign currency account receivable. date 03.01.2021
8. Record the entry to adjust the carrying value of the forward contract to its current fair value. date: 03.01.2021
9. Record the foreign exchange gain or loss on the forward contract. date: 03.01.2021
10. Record the amortization of the forward contract premium or discount.
11. Record the receipt of dinars from the foreign customer. date: 03.01.2021
12. Record the settlement of the forward contract. date: 03.01.2021
Req B1
1. Record the sales and foreign currency account receivable. date: 12.01.2020
2. Record the forward contract. date: 12.01.2020
3. Record the entry to revalue the foreign currency account receivable. date: 12.21.2020
4. Record the change in the fair value of the forward contract. date: 12.31.2020
5. Record the foreign exchange gain or loss on the forward contract. date: 12.31.2020
6. Record the allocation of the premium or discount. date: 12.31.2020
7. Record the entry to revalue the foreign currency account receivable. date: 03.01.2021
8. Record the foreign exchange gain or loss on the forward contract. date: 03.01.2021
9. Record the entry to adjust the carrying value of the forward contract to its current fair value. date: 03.01. 2021
10. Record the entry to adjust the net amount recognized as foreign exchange gain or loss to reflect the amortization of the forward contract premium or discount. date: 03.01.2021
11. Record the receipt of dinars from the foreign customer. date: 03.01.2021
12. Record the settlement of the forward contract. date: 03.01.2021
Icebreaker Company (a U.S.-based company) sells parts to a foreign customer on December 1, 2020, with payment of 29,000 dinars to be received on March 1, 2021. Icebreaker enters into a forward contract on December 1, 2020, to sell 29,000 dinars on March 1, 2021. The forward points on the forward contract are excluded in assessing hedge effectiveness and are amortized to net income using a straight-line method on a monthly basis. Relevant exchange rates for the dinar on various dates are as follows: Date December 1, 2020 December 31, 2020 March 1, 2021 Spot Rate $ 4.70 4.80 4.95 Forward Rate (to March 1, 2021) $ 4.775 4.900 N/A Icebreaker must close its books and prepare financial statements at December 31. a-1. Assuming that Icebreaker designates the forward contract as a cash flow hedge of a foreign currency receivable, prepare journal entries for the sale and foreign currency forward contract in U.S. dollars. a-2. What is the impact on 2020 net income? a-3. What is the impact on 2021 net income? a-4. What is the impact on net income over the two accounting periods? b-1. Assuming that Icebreaker designates the forward contract as a fair value hedge of a foreign currency receivable, prepare journal entries for the sale and foreign currency forward contract in U.S. dollars. b-2. What is the impact on 2020 net income? b-3. What is the impact on 2021 net income? b-4. What is the impact on net income over the two accounting periods? Complete this question by entering your answers in the tabs below. Reg A1 Req A2 to A4 Req B1 Req B2 to B4 Assuming that Icebreaker designates the forward contract as a cash flow hedge of a foreign currency receivable, prepare journal entrie for the sale and foreign currency forward contract in U.S. dollars. (If no entry is required for a transaction/event, select "No journal en required" in the first account field. Do not round intermediate calculations.) View transaction list Journal entry worksheet Icebreaker Company (a U.S.-based company) sells parts to a foreign customer on December 1, 2020, with payment of 29,000 dinars to be received on March 1, 2021. Icebreaker enters into a forward contract on December 1, 2020, to sell 29,000 dinars on March 1, 2021. The forward points on the forward contract are excluded in assessing hedge effectiveness and are amortized to net income using a straight-line method on a monthly basis. Relevant exchange rates for the dinar on various dates are as follows: Date December 1, 2020 December 31, 2020 March 1, 2021 Spot Rate $ 4.70 4.80 4.95 Forward Rate (to March 1, 2021) $ 4.775 4.900 N/A Icebreaker must close its books and prepare financial statements at December 31. a-1. Assuming that Icebreaker designates the forward contract as a cash flow hedge of a foreign currency receivable, prepare journal entries for the sale and foreign currency forward contract in U.S. dollars. a-2. What is the impact on 2020 net income? a-3. What is the impact on 2021 net income? a-4. What is the impact on net income over the two accounting periods? b-1. Assuming that Icebreaker designates the forward contract as a fair value hedge of a foreign currency receivable, prepare journal entries for the sale and foreign currency forward contract in U.S. dollars. b-2. What is the impact on 2020 net income? b-3. What is the impact on 2021 net income? b-4. What is the impact on net income over the two accounting periods? Complete this question by entering your answers in the tabs below. Reg A1 Req A2 to A4 Req B1 Req B2 to B4 Assuming that Icebreaker designates the forward contract as a cash flow hedge of a foreign currency receivable, prepare journal entrie for the sale and foreign currency forward contract in U.S. dollars. (If no entry is required for a transaction/event, select "No journal en required" in the first account field. Do not round intermediate calculations.) View transaction list Journal entry worksheet
