On November 1,2010,Mayberry Corporation,a U.S.corporation,purchased from Cantata Corporation,a Mexican company,some machinery that cost 1,000,000 pesos.The invoice was payable in pesos on January 30,2011.To hedge against rapid changes in the peso,Mayberry entered into a forward contract on November 1,2010 with AB Trader & Company,a US brokerage and investment firm.The contract specified that Mayberry would buy 1,000,000 pesos from AB Trader at $0.084 per peso for settlement on January 30,2011.
Assume that all three companies are subject to the same accounting standards and have December 31st year-ends.The spot rates for pesos on November 1,December 31,and January 30,are $0.082,$0.080,and $0.089,respectively.The 30-day forward rate for pesos on December 31,2010 is $0.083.The forward contract is not settled net.
Required:
Record General Journal entries for Mayberry Corporation on November 1,December 31,and January 30.If no entry is required on a particular date,indicate "No entry" in the General Journal.This is a fair value hedge.

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The Answer of On November 1,2010,Mayberry Corporation,a U.S.corporation,purchased from Cantata Corporation,a Mexican company,some machinery that cost 1,000,000 pesos.The invoice was payable in pesos on January 30,2011.To hedge against rapid changes in the peso,Mayberry entered into a forward contract on November 1,2010 with AB Trader & Company,a US brokerage and investment firm.The contract specified that Mayberry would buy 1,000,000 pesos from AB Trader at $0.084 per peso for settlement on January 30,2011.
Assume that all three companies are subject to the same accounting standards and have December 31st year-ends.The spot rates for pesos on November 1,December 31,and January 30,are $0.082,$0.080,and $0.089,respectively.The 30-day forward rate for pesos on December 31,2010 is $0.083.The forward contract is not settled net.
Required:
Record General Journal entries for Mayberry Corporation on November 1,December 31,and January 30.If no entry is required on a particular date,indicate "No entry" in the General Journal.This is a fair value hedge.