On November 1, 2021, Americo, Corporation purchased wine on credit from Venezia Company for €800,000. Payment is not due for 120 days. Thus, the transaction will be settled on February 28, 2022. On November 1, 2021, Americo, Corporation also entered a 120-day forward contract to purchase €800,000. The forward contract is not designated as a hedge. The direct exchange rates were as follows: SPOT FORWARD 11/1/2021 $ 1.09 $ 1.06 (120 days) 12/31/2021 $ 1.05 $ 1.11 (60 days) 2/28/2022 $ 1.12 JOURNAL ENTRIES ON NOVEMBER 1, 2021 (TRANSACTION DATE): Foreign Currency Transaction YEAR-END OF DECEMBER 31, 2021: JOURNAL ENTRIES: Foreign Currency Transaction FINANCIAL STATEMENT PRESENTATION INCOME STATEMENT JOURNAL ENTRIES ON FEBRUARY 28, 2022 (SETTLEMENT DATE):
On November 1, 2021, Americo, Corporation purchased wine on credit from Venezia Company for €800,000. Payment is not due for 120 days. Thus, the transaction will be settled on February 28, 2022. On November 1, 2021, Americo, Corporation also entered a 120-day forward contract to purchase €800,000. The forward contract is not designated as a hedge. The direct exchange rates were as follows:
SPOT FORWARD
11/1/2021 $ 1.09 $ 1.06 (120 days)
12/31/2021 $ 1.05 $ 1.11 (60 days)
2/28/2022 $ 1.12
YEAR-END OF DECEMBER 31, 2021:
JOURNAL ENTRIES:
Foreign Currency Transaction
FINANCIAL STATEMENT PRESENTATION INCOME STATEMENT
JOURNAL ENTRIES ON FEBRUARY 28, 2022 (SETTLEMENT DATE):
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