On December 15, 2014, Electronix Company Purchased Inventory from a Foreign

question 16

Essay

On December 15, 2014, Electronix Company purchased inventory from a foreign supplier for 2,000,000 foreign currency units (fcu's). Payment will be made on February 13, 2015. On December 15, 2014, to hedge the transaction, Electronix signed a forward contract to buy 2,000,000 fcu's in 60 days. Electronix uses a discount rate of 5% resulting in a 45-day present value factor of .9938. The forward contract will be settled net. The related exchange rates are shown below:
On December 15, 2014, Electronix recorded a debit to Inventory and a credit to Accounts Payable (fcu) for $20,000, using the current spot rate.
Required:
1. Show the required entries on December 31, 2014 if the hedge is a cash flow hedge. Round to the nearest whole dollar.
2. Show the required entries on December 31, 2014 if the hedge is a fair value hedge. Round to the nearest whole dollar.

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Definitions:

Fecal Material

Waste matter from the digestive tract expelled through the anus.

Urinary Diversion

A surgical procedure to redirect urine flow from its normal pathway due to obstruction or disease, often resulting in urine being diverted to an external pouch or part of the intestine.

Foul-smelling Urine

A condition where urine emits a strong, unpleasant odor, which can be a sign of infection or other urinary tract issues.

Sterile Urine Specimen

A urine sample collected and stored in a way that prevents contamination.