On October 1, 2024, Sunland Corporation ordered some equipment from a supplier for 303,000 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 Sunland 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.)

On October 1, 2024, Sunland Corporation ordered some equipment from a supplier for 303,000 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 Sunland 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.)

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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