On October 1, 2024, Oriole Corporation ordered some equipment from a supplier for 285,000 euros. Delivery and payment are to occur on November 15, 2024. The spot rates on October 1 and November 15, 2024, are $1.20 and $1.30, respectively. (a) Assume that Oriole entered into a forward contract on October 1, 2024, to hedge the firm commitment. The forward rates for euros for November 15 delivery were October 1 November 15 $1.23 $1.30 Furthermore, assume the equipment was purchased and paid for on November 15. Prepare all journal entries needed to record and settle the hedge and to record the purchase of the equipment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date Account Titles and Explanation Debit Credit
On October 1, 2024, Oriole Corporation ordered some equipment from a supplier for 285,000 euros. Delivery and payment are to occur on November 15, 2024. The spot rates on October 1 and November 15, 2024, are $1.20 and $1.30, respectively. (a) Assume that Oriole entered into a forward contract on October 1, 2024, to hedge the firm commitment. The forward rates for euros for November 15 delivery were October 1 November 15 $1.23 $1.30 Furthermore, assume the equipment was purchased and paid for on November 15. Prepare all journal entries needed to record and settle the hedge and to record the purchase of the equipment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date Account Titles and Explanation Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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N11.
Account
![On October 1, 2024, Oriole Corporation ordered some equipment from a supplier for 285,000 euros. Delivery and payment are to
occur on November 15, 2024. The spot rates on October 1 and November 15, 2024, are $1.20 and $1.30, respectively.
(a)
Assume that Oriole entered into a forward contract on October 1, 2024, to hedge the firm commitment. The forward rates for
euros for November 15 delivery were
October 1
November 15
$1.23
$1.30
Furthermore, assume the equipment was purchased and paid for on November 15. Prepare all journal entries needed to record
and settle the hedge and to record the purchase of the equipment. (Credit account titles are automatically indented when the amount
is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit
entries before credit entries.)
Date
Account Titles and Explanation
(To record gain or loss on foreign currency)
Debit
Credit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcd96efc3-2f98-4cac-898c-7da2d5d05bd8%2Fbd2bef4c-49a2-4c1e-a027-b3075a40d22e%2Ff98ip2_processed.png&w=3840&q=75)
Transcribed Image Text:On October 1, 2024, Oriole Corporation ordered some equipment from a supplier for 285,000 euros. Delivery and payment are to
occur on November 15, 2024. The spot rates on October 1 and November 15, 2024, are $1.20 and $1.30, respectively.
(a)
Assume that Oriole entered into a forward contract on October 1, 2024, to hedge the firm commitment. The forward rates for
euros for November 15 delivery were
October 1
November 15
$1.23
$1.30
Furthermore, assume the equipment was purchased and paid for on November 15. Prepare all journal entries needed to record
and settle the hedge and to record the purchase of the equipment. (Credit account titles are automatically indented when the amount
is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit
entries before credit entries.)
Date
Account Titles and Explanation
(To record gain or loss on foreign currency)
Debit
Credit
![(To record gain or loss on firm commitment)
(To record payment to exchange dealer and receipt of
foreign currency)
Show Transcribed Text
(To record gain or loss on firm commitment)
(To record payment to exchange dealer and receipt of
foreign currency)
Show Transcribed Text
J
If the forward contract was not acquired, record the journal entry to purchase the equipment. (Credit account titles are
automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles
and enter O for the amounts. List debit entry before credit entry.)
Account Titles and Explanation
Show Transcribed Text
Debit
Credit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcd96efc3-2f98-4cac-898c-7da2d5d05bd8%2Fbd2bef4c-49a2-4c1e-a027-b3075a40d22e%2Fnsofi0j_processed.jpeg&w=3840&q=75)
Transcribed Image Text:(To record gain or loss on firm commitment)
(To record payment to exchange dealer and receipt of
foreign currency)
Show Transcribed Text
(To record gain or loss on firm commitment)
(To record payment to exchange dealer and receipt of
foreign currency)
Show Transcribed Text
J
If the forward contract was not acquired, record the journal entry to purchase the equipment. (Credit account titles are
automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles
and enter O for the amounts. List debit entry before credit entry.)
Account Titles and Explanation
Show Transcribed Text
Debit
Credit
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