On 12/1/06, Salox entered into a 50-day FX forward to hedge a noncancellable sales order it received that day that will require payment of 1,000,000 euros in 50 days by a French customer. Direct exchange rates for the euro are as follows:
Required:
a. Prepare all journal entries relating to the FX forward over the contract's life.
b. Prepare the journal entry to record the inventory sale.

Question

On 12/1/06, Salox entered into a 50-day FX forward to hedge a noncancellable sales order it received that day that will require payment of 1,000,000 euros in 50 days by a French customer. Direct exchange rates for the euro are as follows:
  Required:
a. Prepare all journal entries relating to the FX forward over the contract's life.
b. Prepare the journal entry to record the inventory sale.

Quizplus · Accepted Answer

The Answer of On 12/1/06, Salox entered into a 50-day FX forward to hedge a noncancellable sales order it received that day that will require payment of 1,000,000 euros in 50 days by a French customer. Direct exchange rates for the euro are as follows:
  Required:
a. Prepare all journal entries relating to the FX forward over the contract's life.
b. Prepare the journal entry to record the inventory sale.

On 12/1/06, Salox Entered into a 50-Day FX Forward to Hedge