On January 1, 2016, a U

question 21

Essay

On January 1, 2016, a U.S.firm bought a truck from a foreign firm for 10,000 FC, to be paid on March 1 in FC.The spot rate was 1 FC = $1.25 on January 1 and 1 FC = $1.265 on March 1.To protect themselves from exchange rate changes, the U.S.firm entered into a forward exchange contract on January 1 to buy FC on March 1 for $1.28.
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Required:
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Make all the necessary journal entries to record the transactions for the U.S.firm on January 1 and March 1.Ignore the split between spot gain/loss and time value.

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Definitions:

Body Fat

The portion of the human body made up of fat tissues, which serves as a source of energy, insulation, and protection.

Air Temperature

The measure of the warmth or coldness of the air in the environment, typically recorded in degrees Celsius or Fahrenheit.

Vernix Caseosa

A waxy or cheese-like white substance found coating the skin of newborns that provides protection while in the womb.

Fontanelles

Soft spots on a baby's skull where the bones have not yet fused together, allowing for growth of the brain.