The journal entry on 11/01/20 TO RECORD ENTRY INTO THE FORWARD CONTRACT would include: A DEBIT TO FC RECEIVABLE FROM EX BROKER (€) AND A CREDIT TO US DOLLARS PAYABLE TO FX BROKER IN THE AMOUNT OF:
The journal entry on 11/01/20 TO RECORD ENTRY INTO THE FORWARD CONTRACT would include: A DEBIT TO FC RECEIVABLE FROM EX BROKER (€) AND A CREDIT TO US DOLLARS PAYABLE TO FX BROKER IN THE AMOUNT OF:
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter9: Operating Activities
Section: Chapter Questions
Problem 22PC
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![The journal entry on 11/01/20 TO RECORD ENTRY INTO THE FORWARD CONTRACT would include:
A DEBIT TO FC RECEIVABLE FROM EX BROKER (€) AND A CREDIT TO US DOLLARS PAYABLE TO FX
BROKER IN THE AMOUNT OF:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F562c2bc8-e4dc-4136-bc8e-bfaf1de8e782%2F696bc0ab-e1cb-49a3-a9bf-ffdc2e988260%2Fg6wxbyg_processed.png&w=3840&q=75)
Transcribed Image Text:The journal entry on 11/01/20 TO RECORD ENTRY INTO THE FORWARD CONTRACT would include:
A DEBIT TO FC RECEIVABLE FROM EX BROKER (€) AND A CREDIT TO US DOLLARS PAYABLE TO FX
BROKER IN THE AMOUNT OF:
![On November 1, 2020, 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, 2021. On November 1, 2020,
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
11/1/2020 $ 1.22 $
12/31/2020
2/28/2021 $ 1.19
1.24 (120 days)
1.17 (60 days)
1.18 $](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F562c2bc8-e4dc-4136-bc8e-bfaf1de8e782%2F696bc0ab-e1cb-49a3-a9bf-ffdc2e988260%2Fmju8cna_processed.png&w=3840&q=75)
Transcribed Image Text:On November 1, 2020, 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, 2021. On November 1, 2020,
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
11/1/2020 $ 1.22 $
12/31/2020
2/28/2021 $ 1.19
1.24 (120 days)
1.17 (60 days)
1.18 $
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