On December 1,2008,Denizen Corporation entered into a 120-day forward contract to purchase 200,000 Canadian dollars (C$).Denizen's fiscal year ends on December 31.The forward contract was to hedge an anticipated purchase of electronic goods on January 30,2009.The purchase took place on January 30,with payment due on March 31,2009.The derivative is designated as a cash flow hedge.The company uses the forward exchange rate to measure hedge effectiveness.The direct exchange rates follow:
Required:
Prepare all journal entries for Denizen Corporation.
Definitions:
Consensus Forecast
A forecasting method involving the aggregation of predictions from various experts or models, aiming for a more accurate and reliable outcome by considering multiple perspectives.
Production Flexibility
Production flexibility is the ability of a manufacturing system to quickly adapt to changes in products, production volumes, and manufacturing processes.
Demand Types
The classification of consumer desires or needs that drive the production of goods or services, including elastic, inelastic, and unitary demand.
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