Shannon Company has agreed to buy on September 1, 2018 Inventory for delivery on March 1, 2019 from a German supplier. The cost of the equipment is 500,000 EUROS and the bill will be settled in Euros. The purchase qualfies as a firm purchase commitment, as a contract was signed on September 1, 2018.

Shannon enters into a forward contract to buy the needed Euros on March 1 at the 180 day forward rate. Exchange rates for 1.0 Euro are as follows

Part A: Record the entries needed on September 1:

Part B: Record the entries needed at year end, December 31.

Part C: Record the entries needed on March 1, including the purchase of inventory.

Sep 1 Spot 180 day forward 60 day forward $1.34 $1.38 $1.37 Dec 31 $1.39 $1.44 $1.40 March 1 $1.43 $1.45 $1.44