Prepare jouranal entries to record the transaction On December 1, 2020, Beta Company, a U.S. olectronics company purchased equipment from a Brazilian company for 900,000 Brazilian Real. The account is to be settled onJanuary 31, 2021. To hedge against fluctuations in the exchange rate, On December 1, 2020 Beta Company entered into a forward contract to buy the 900,000 Brazilian Real onJanuary 31, 2021 for $0.5453.Beta Company's year-end is December 31 and Soot rates and the forward rates for the Brazilian Real were as follows:SpotRateForward Rate(Delivery on January 31,2021)December 1, 2020 S0.5451December 31.2020January 31,2021$0.5453$0.5426$0.5425$0.5395Required:

It is a contract under which a business consents to purchase a specific measure of a foreign…

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Business

Accounting

Land the forward.rates for the Brazilan Real Spot Rate Fow (Delivery c 2021) December 1, 2020 $0.5451

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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Concept explainers

Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

Question

Prepare jouranal entries to record the transaction

On December 1, 2020, Beta Company, a U.S. olectronics company purchased equipment from a Brazilian company for 900,000 Brazilian Real. The account is to be settled on
January 31, 2021. To hedge against fluctuations in the exchange rate, On December 1, 2020 Beta Company entered into a forward contract to buy the 900,000 Brazilian Real on
January 31, 2021 for $0.5453.
Beta Company's year-end is December 31 and Soot rates and the forward rates for the Brazilian Real were as follows:
Spot
Rate
Forward Rate
(Delivery on January 31,
2021)
December 1, 2020 S0.5451
December 31.
2020
January 31,2021
$0.5453
$0.5426
$0.5425
$0.5395
Required:

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