On December 1,20X8,Denizen Corporation Entered into a 120-Day Forward Contract

question 7

Essay

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 an anticipated purchase of electronic goods on January 30,20X9.The purchase took place on January 30,with payment due on March 31,20X9.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.

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Definitions:

Sale of Land

The transfer of ownership and title of a parcel of real property from one party to another, typically through a purchase agreement or contract.

Statute of Frauds

A legal principle requiring certain contracts to be in writing and signed by the parties to be enforceable.

Attached to Land

Refers to something that is physically or legally connected to a piece of land, such as a building or a fixture, which becomes part of the real property.

Admission Exception

A principle in evidence law that allows certain statements that would normally be considered hearsay to be admissible as evidence in court.