Prepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract. (Do not round intermedia calculations. Round your final answers to the nearest whole dollar. If no entry is required for a transaction/event, select "No journal ent required" in the first account field.) View transaction list Record the premium or discount expense. 12 <> 7 Record the entry for changes in the exchange rate. Record entry to adjust the carrying value of the forward contract to its current fair value. 8 Record the change in the fair value of the forward contract. Credit 10 Record the premium or discount expense. 11 Record the receipt of FCUS. 12 Record settlement of forward contract.
Prepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract. (Do not round intermedia calculations. Round your final answers to the nearest whole dollar. If no entry is required for a transaction/event, select "No journal ent required" in the first account field.) View transaction list Record the premium or discount expense. 12 <> 7 Record the entry for changes in the exchange rate. Record entry to adjust the carrying value of the forward contract to its current fair value. 8 Record the change in the fair value of the forward contract. Credit 10 Record the premium or discount expense. 11 Record the receipt of FCUS. 12 Record settlement of forward contract.
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter13: Marketable Securities And Derivatives
Section: Chapter Questions
Problem 21E
Related questions
Question
![Prepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract. (Do not round intermedia
calculations. Round your final answers to the nearest whole dollar. If no entry is required for a transaction/event, select "No journal ent
required" in the first account field.)
View transaction list
6.
Record the premium or discount expense.
12
7
Record the entry for changes in the exchange rate.
8
Record entry to adjust the carrying value of the forward
contract to its current fair value.
9.
Record the change in the fair value of the forward
contract.
Credit
10 Record the premium or discount expense.
11
Record the receipt of FCUS.
12 Record settlement of forward contract.
Note :
journal entry has been entered
%3D](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fed0aa600-6755-4de2-bc40-ec795e9296f7%2Fb891416b-5b47-4828-9524-43ba681f4d0f%2Ffcqex3b_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Prepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract. (Do not round intermedia
calculations. Round your final answers to the nearest whole dollar. If no entry is required for a transaction/event, select "No journal ent
required" in the first account field.)
View transaction list
6.
Record the premium or discount expense.
12
7
Record the entry for changes in the exchange rate.
8
Record entry to adjust the carrying value of the forward
contract to its current fair value.
9.
Record the change in the fair value of the forward
contract.
Credit
10 Record the premium or discount expense.
11
Record the receipt of FCUS.
12 Record settlement of forward contract.
Note :
journal entry has been entered
%3D
![On November 1, 2017, Bernard Company (a U.S.-based company) sold merchandise to a foreign customer for 180,000 FCUS with
payment to be received on April 30, 2018. At the date of sale, Bernard entered into a six-month forward contract to sell 180,000
FCUS. The company properly designates the forward contract as a cash flow hedge of a foreign currency receivable. The
following exchange rates apply:
Forward Rate
Spot Rate
$0.29
Date
(to April 30, 2018)
$ 0.28
November 1, 2017
December 31, 2017
April 30, 2018
0.27
0.25
0.26
N/A
Bernard's incremental borrowing rate is 12 percent. The present value factor for four months at an annual interest rate of 12
percent (1 percent per month) is 0.9610.
a. Prepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract.
b. What is the impact on net income in 2017?
C. What is the impact on net income in 2018?
Complete this question by entering your answers in the tabs below.
Req A
Req B and C
Prepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract. (Do not round intermediat](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fed0aa600-6755-4de2-bc40-ec795e9296f7%2Fb891416b-5b47-4828-9524-43ba681f4d0f%2Fs9j3ojf_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On November 1, 2017, Bernard Company (a U.S.-based company) sold merchandise to a foreign customer for 180,000 FCUS with
payment to be received on April 30, 2018. At the date of sale, Bernard entered into a six-month forward contract to sell 180,000
FCUS. The company properly designates the forward contract as a cash flow hedge of a foreign currency receivable. The
following exchange rates apply:
Forward Rate
Spot Rate
$0.29
Date
(to April 30, 2018)
$ 0.28
November 1, 2017
December 31, 2017
April 30, 2018
0.27
0.25
0.26
N/A
Bernard's incremental borrowing rate is 12 percent. The present value factor for four months at an annual interest rate of 12
percent (1 percent per month) is 0.9610.
a. Prepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract.
b. What is the impact on net income in 2017?
C. What is the impact on net income in 2018?
Complete this question by entering your answers in the tabs below.
Req A
Req B and C
Prepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract. (Do not round intermediat
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