On October 1, 2011, Jarvis Co

question 10

Essay

On October 1, 2011, Jarvis Co. sold inventory to a customer in a foreign country, denominated in 100,000 local currency units (LCU). Collection is expected in four months. On October 1, 2011, a forward exchange contract was acquired whereby Jarvis Co. was to pay 100,000 LCU in four months (on February 1, 2012) and receive $78,000 in U.S. dollars. The spot and forward rates for the LCU were as follows: The company's borrowing rate is 12%. The present value factor for one month is .9901.
Any discount or premium on the contract is amortized using the straight-line method.
Assuming this is a fair value hedge; prepare journal entries for this sales transaction and forward contract.

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Definitions:

Multicultural Counseling Competencies

The knowledge, skills, and attitudes required to provide effective, respectful, and sensitive mental health services to clients from diverse cultural backgrounds.

Ethnocentric Attitudes

Viewing one's own cultural group as superior or using one's own cultural standards to judge those of other groups, often leading to prejudice and discrimination.

Culturally Diverse Populations

Groups of people with varied ethnic, racial, linguistic, or cultural backgrounds making up a community or society.

Cultural Tunnel Vision

A limited or narrow perspective that fails to recognize or appreciate cultural diversity and complexities.