On October 1, 2021, Jarvis Co. sold inventory to a customer in a foreign country, denominated in 100,000 local currency units (LCU). Collection is expected in four months. On October 1, 2021, a forward exchange contract was acquired whereby Jarvis Co. was to pay 100,000 LCU in four months (on February 1, 2022)and receive $78,000 in U.S. dollars. The spot and forward rates for the LCU were as follows:
The company's borrowing rate is 12%. The present value factor for one month is 0.9901.Any discount or premium on the contract is amortized using the straight-line method.Assuming this is a cash flow hedge; prepare journal entries for this sales transaction and forward contract.
Definitions:
No Basis In Fact
A statement or belief that lacks any factual support or evidence.
Biological Relatives
Family members related by blood, such as parents, siblings, and offspring, as opposed to those related by law or marriage.
Adoptees With Schizophrenia
Refers to individuals who were adopted and later diagnosed with schizophrenia, a mental disorder characterized by delusions, hallucinations, and disordered thinking.
Adoptive Relatives
Family members who become part of one's family through the process of adoption, not through biological means.
Q22: Name the pornographic film that had wide
Q51: What exchange rate would be used to
Q55: When a parent uses the partial equity
Q57: Allen Co. held 80% of the common
Q76: Stiller Company, an 80% owned subsidiary of
Q80: Ryan Company purchased 80% of Chase Company
Q86: How would consolidated earnings per share be
Q86: Authoritative literature provides guidance for hedges of
Q86: Esposito is an Italian subsidiary of a
Q101: On January 1, 2020, Barber Corp. paid