Please do not give solution in image format ? And Fast Answering Please And Explain Proper Step by Step. On August 1, Year 3, Carleton Ltd. ordered machinery from a supplier in Hong Kong for HK$500,000. The machinery wasdelivered on October 1, Year 3, with terms requiring payment in full by December 31, Year 3. On August 2, Year 3, Carletonentered a forward contract to purchase HK$500,000 on December 31, Year 3, at a rate of $0.165. On December 31, Year 3,Carleton settled the forward contract and paid the supplier.Exchange rates were as follows:August 1 and 2, Year 3October 1, Year 3December 31, Year 3#For contracts expiring on December 31, Year 3.Show Transcribed TextView transaction list(c) Assume that hedge accounting was not applied. Prepare the journal entries for Year 3 to record all the activity describedabove and prepare a summary journal entry for the combined effect of all entries. (If no entry is required for atransaction/event, select "No journal entry required" in the first account field.)Recored the contract to purchase machinery.2 Record the forward contract.Spot RatesHK$1 C$0.160HK$1 C$0.164HK$1= C$0.1693 Record the purchase of machinery.4 Revalue forward contract at fair value.5 Revalue forward contract at fair value.6 Revalue accounts payable at fair value.Record the cash received frombank.8 Record payment of accounts payable.Show Transcribed TextView transaction listRecord the forward contract.3 Record the purchase of machinery.Revalue forward contract at fair value.5 Revalue forward contract at fair value.S6 Revalue accounts payable at fair value.7 Record the cash received frombank.8 Record payment of accounts payable.9 Record summary entry for all entries combined.Forward Rates#HK$1 C$0.165HK$1= C$0.168HK$1 C$0.1693(c) Assume that hedge accounting was not applied. Prepare the journal entries for Year 3 to record all the activity describedabove and prepare a summary journal entry for the combined effect of all entries. (If no entry is required for atransaction/event, select "No journal entry required" in the first account field.)EXĈ9XCredit82,7259Credit>82,725> (c) Assume that hedge accounting was not applied. Prepare the journal entries for Year 3 to record all the activity describedabove and prepare a summary journal entry for the combined effect of all entries. (If no entry is required for atransaction/event, select "No journal entry required" in the first account field.)1No23456789DateAugust 1, Year 3August 2, Year 3EquipmentAccounts payableForward contract.Accounts payableOctober 1, Year 3 No journal entry requiredOctober 1, Year 3 Accounts payableForward contractDecember 31, Year Accounts payableCashDecember 31, Year No journal entry requiredDecember 31, Year EquipmentAccounts payableShow Transcribed TextDecember 31, Year No journal entry requiredSummary journal e Accounts payableCashAnswer is not complete.General Journal3CXXXXxXXxxXXxXDebit82.725 X82,725 X82,725 X82,725 X82,725 X82,725 XCredit82,72582,725 X82,72582,725 X82,725 X82,725

Hedging is a process of mitigating risk due to the fluctuation of foreign exchange rates. Hedging is…

On August 1, Year 3, Carleton Ltd. ordered machinery from a supplier in Hong Kong for HK$500,000. The machinery was delivered on October 1, Year 3, with terms requiring payment in full by December 31, Year 3. On August 2, Year 3, Carleton entered a forward contract to purchase HK$500,000 on December 31, Year 3, at a rate of $0.165. On December 31, Year 3, Carleton settled the forward contract and paid the supplier.