Prepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract. (Do not round intermediacalculations. Round your final answers to the nearest whole dollar. If no entry is required for a transaction/event, select "No journal entrequired" in the first account field.)View transaction list6.Record the premium or discount expense.127Record the entry for changes in the exchange rate.8Record entry to adjust the carrying value of the forwardcontract to its current fair value.9.Record the change in the fair value of the forwardcontract.Credit10 Record the premium or discount expense.11Record the receipt of FCUS.12 Record settlement of forward contract.Note :journal entry has been entered%3D On November 1, 2017, Bernard Company (a U.S.-based company) sold merchandise to a foreign customer for 180,000 FCUS withpayment to be received on April 30, 2018. At the date of sale, Bernard entered into a six-month forward contract to sell 180,000FCUS. The company properly designates the forward contract as a cash flow hedge of a foreign currency receivable. Thefollowing exchange rates apply:Forward RateSpot Rate$0.29Date(to April 30, 2018)$ 0.28November 1, 2017December 31, 2017April 30, 20180.270.250.26N/ABernard's incremental borrowing rate is 12 percent. The present value factor for four months at an annual interest rate of 12percent (1 percent per month) is 0.9610.a. Prepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract.b. What is the impact on net income in 2017?C. What is the impact on net income in 2018?Complete this question by entering your answers in the tabs below.Req AReq B and CPrepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract. (Do not round intermediat

PLEASE LIKE THE ANSWER, YOUR RESPONSE MATTERS 6 Discount expense…

Prepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract. (Do not round intermedia calculations. Round your final answers to the nearest whole dollar. If no entry is required for a transaction/event, select "No journal ent required" in the first account field.) View transaction list Record the premium or discount expense. 12 <> 7 Record the entry for changes in the exchange rate. Record entry to adjust the carrying value of the forward contract to its current fair value. 8 Record the change in the fair value of the forward contract. Credit 10 Record the premium or discount expense. 11 Record the receipt of FCUS. 12 Record settlement of forward contract.

Prepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract. (Do not round intermedia calculations. Round your final answers to the nearest whole dollar. If no entry is required for a transaction/event, select "No journal ent required" in the first account field.) View transaction list Record the premium or discount expense. 12 <> 7 Record the entry for changes in the exchange rate. Record entry to adjust the carrying value of the forward contract to its current fair value. 8 Record the change in the fair value of the forward contract. Credit 10 Record the premium or discount expense. 11 Record the receipt of FCUS. 12 Record settlement of forward contract.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter13: Marketable Securities And Derivatives

Section: Chapter Questions

Problem 21E

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On November 1, 2017, Bernard Company (a U.S.-based company) sold merchandise to a foreign customer for 100,000 FCUs with payment to be received on April 30, 2018. At the date of sale, Bernard entered into a six-month forward contract to sell 100,000 FCUs. The company properly designates the forward contract as a cash flow hedge of a foreign currency receivable. The following exchange rates apply: Date Spot rate Forward rate (to April 30, 2018) November 1, 2017 $0.21 $0.20 December 31, 2017 0.19 0.17 April 30, 2018 0.18 N/A Bernard’s incremental borrowing rate is 12 percent. The present value factor for four months at an annual interest rate of 12 percent (1 percent per month) is 0.9610.a. Prepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract.b. What is the impact on net income in 2017?c. What is the impact on net income in 2018?
On November 1, 2017, Bernard Company (a U.S.-based company) sold merchandise to a foreign customer for 100,000 FCUs with payment to be received on April 30, 2018. At the date of sale, Bernard entered into a six-month forward contract to sell 100,000 FCUs. The company properly designates the forward contract as a cash flow hedge of a foreign currency receivable. The following exchange rates apply:Bernard’s incremental borrowing rate is 12 percent. The present value factor for four months at an annual interest rate of 12 percent (1 percent per month) is 0.9610.a. Prepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract.b. What is the impact on net income in 2017?c. What is the impact on net income in 2018?
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MNC Corp. (a U.S.-based company) sold parts to a South Korean customer on December 1, 2017, with payment of 10 million South Korean won to be received on March 31, 2018. The following exchange rates apply: Date Spot Rate Forward rate ( to march 31, 2018 ) December 1, 2017 $0.0035 $0.0034 December 31, 2017 0.0033 0.0032 March 31, 2018 0.0038 N/A MNC’s incremental borrowing rate is 12 percent. The present value factor for three months at an annual interest rate of 12 percent (1 percent per month) is 0.9706. Assuming that MNC did not enter into a forward contract, how much foreign exchange gain or loss should it report on its 2017 income statement with regard to this transaction? Choose the correct.a. $5,000 gainb. $3,000 gainc. $2,000 lossd. $1,000 loss
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