Duck Corporation "forecasted" on December 21, 2020 to sell a machine to a company in Italy. The selling price was 500,000 euros, to be paid on March 21, 2021. To hedge against fluctuations in the exchange rate, Duck entered into a forward contract on Dec. 21, 2020 to sell 500,000 euros on March 21, 2021, the agreed date of machine delivery, for $1.227 per euro. The company ends its fiscal year on December 31. The following exchange rates were quoted: Forward Rate Date Spot Rate (Delivery on 3/21/2020) 12/21/2020 1.228 1.227 12/31/2020 1.222 1.221 3/21/2021 1.225 Required: A. Prepare all journal entries relative to the above event on December 21, 2020. B. Prepare all journal entries relative to the above event on December 31, 2020. C. Prepare all journal entries relative to the above event on March 21, 2021.

Duck Corporation "forecasted" on December 21, 2020 to sell a machine to a company in Italy. The selling price was 500,000 euros, to be paid on March 21, 2021. To hedge against fluctuations in the exchange rate, Duck entered into a forward contract on Dec. 21, 2020 to sell 500,000 euros on March 21, 2021, the agreed date of machine delivery, for $1.227 per euro. The company ends its fiscal year on December 31. The following exchange rates were quoted: Forward Rate Date Spot Rate (Delivery on 3/21/2020) 12/21/2020 1.228 1.227 12/31/2020 1.222 1.221 3/21/2021 1.225 Required: A. Prepare all journal entries relative to the above event on December 21, 2020. B. Prepare all journal entries relative to the above event on December 31, 2020. C. Prepare all journal entries relative to the above event on March 21, 2021.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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