On January 1, 20X1, a U.S. firm bought a truck from a foreign firm for 10,000 FCs, to be paid on March 1 in FCs. The spot rate was 1 FC = $1.25 on January 1 and 1 FC = $1.265 on March 1. To protect themselves from exchange rate changes, the U.S. firm entered into a forward exchange contract on January 1 to buy FCs on March 1 for $1.28.
Required:
Make all the necessary journal entries to record the transactions for the U.S. firm on January 1 and March 1.

Question

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The Answer of On January 1, 20X1, a U.S. firm bought a truck from a foreign firm for 10,000 FCs, to be paid on March 1 in FCs. The spot rate was 1 FC = $1.25 on January 1 and 1 FC = $1.265 on March 1. To protect themselves from exchange rate changes, the U.S. firm entered into a forward exchange contract on January 1 to buy FCs on March 1 for $1.28.
Required:
Make all the necessary journal entries to record the transactions for the U.S. firm on January 1 and March 1.