On November 1, 2020, Americo, Corporation sold wine on credit to Venezia Company for €800,000. Payment is notdue for 120 days. Thus, the transaction will be settled on February 28, 2021. On November 1, 2020, Americo,Corporation also entered a 120-day forward contract to sell €800,000. The forward contract is not designated as ahedge. The direct exchange rates were as follows:SPOTFORWARD11/1/2020 $ 1.22 $12/31/2020 $ 1.18 $2/28/2021 $ 1.191.24 (120 days)1.17 (60 days) A DEBIT TO FC RECEIVABLE FROM CUSTOMER (€) AND A CREDIT TO FOREIGN CURRENCY TRANSACTIONGAIN IN THE AMOUNT OF:The journal entry on 12/31/20 TO RECORD THE REVALUATION OF THE FC PAYABLE TO FX BROKER (€) wouldinclude:A DEBIT TO FOREIGN CURRENCY TRANSACTION LOSS AND A CREDIT TO FC PAYABLE TO FX BROKER (€)IN THE AMOUNT OF:The journal entry on 02/28/21 TO RECORD SETTLEMENT OF THE FC RECEIVABLE FROM CUSTOMER wouldinclude:A DEBIT TO FOREIGN CURRENCY UNITS (€) AND A CREDIT TO FC RECEIVABLE FROM CUSTOMER (€) INTHE AMOUNT OF:The FIRST journal entry on 02/28/21 TO RECORD SETTLEMENT OF THE FORWARD CONTRACT would include:A DEBIT TO FC PAYABLE TO FX BROKER (€) AND A CREDIT TO FOREIGN CURRENCY UNITS (€) IN THEAMOUNT OF:The SECOND journal entry on 02/28/21 TO RECORD SETTLEMENT OF THE FORWARD CONTRACT wouldinclude:A DEBIT TO CASH AND A CREDIT T O US DOLLARS RECEIVABLE FROM EX BROKER IN THE AM OUNT OF.

When an entity exports goods to other countries, there is a foreign exchange risk that arises as the…

Answered: n November 1, 2020, Americo, Corporati…

n November 1, 2020, Americo, Corporati ue for 120 days. Thus, the transaction w orporation also entered a 120-day forwar edge. The direct exchange rates were as

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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