Jack, chief finance officer for sitcom products, convinced the president of the company to enter in to a 90days, forward contract to sell 500,000 kronas as a speculative venture. When the forward contract was acquired on November 1, 2019, the spot rate for the krona was OMR .8041 and the 90days future rate was OMR .8321. At December 31 2019, the end of the firm's fiscal year, the spot rate was $.9483 and the future rate for kronas to be sold on January 30, 2020, was $.9948. On January 30, 2020, the spot rate was $.9830. Required: Prepare all necessary journal entries in regard to the forward contract.

Jack, chief finance officer for sitcom products, convinced the president of the company to enter in to a 90days, forward contract to sell 500,000 kronas as a speculative venture. When the forward contract was acquired on November 1, 2019, the spot rate for the krona was OMR .8041 and the 90days future rate was OMR .8321. At December 31 2019, the end of the firm's fiscal year, the spot rate was $.9483 and the future rate for kronas to be sold on January 30, 2020, was $.9948. On January 30, 2020, the spot rate was $.9830. Required: Prepare all necessary journal entries in regard to the forward contract.

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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