On December 1,20X8,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 a firm commitment agreement made on December 1,20X8,to purchase electronic goods on January 30,with payment due on March 31,20X8.The derivative is designated as a fair value hedge.The direct exchange rates follow:
Required:
Prepare all journal entries for Denizen Corporation.
Definitions:
Liabilities
Financial obligations or debts owed by an individual, business, or organization to others.
Highly Liquid Assets
Assets that can be easily and quickly converted into cash without significant loss in value, such as cash itself or treasury bills.
Large Withdrawals
Substantial amounts of money taken out from a bank account or investment, which can significantly impact the financial stability of the institution holding the funds.
Checking Deposits
Deposits held in bank accounts from which funds can be withdrawn without notice using checks, debit cards, or electronic transfers.
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