Hedging a Forecasted Transaction On September I, 2013, Morton Industries, a calendar-year company, decided to purchase merchandise from a supplier in Jordan for 1,000,000 dinar at the end of January, 2014. Morton plans to submit payment to the supplier on March 1, 2014. Concurrently, Morton purchased 1,000,000 dinar forward for delivery on March 1, 2014, for a total price of $1,420,000. This forward contract qualifies as a hedge of a forecasted transaction. On January 29, 2014, Morton took delivery of the merchandise. On March 1, 2014, the forward contract was settled and payment was made to the supplier. On April 8, 2014, the merchandise was sold to a U.S. customer for $1,600,000. Relevant exchange rates ($/dinar) are as follows:

Required
Prepare the required journal entries to record the above events, including December 31, 2013 adjusting entries.

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Forward Rate for Delivery on March 1, 2014 Spot Rate $1.410 1.431 1.450 1.460 $1.420 1.441 1.458 1.460 September 1,2013. December 31, 2013 January 29,2014 March 1, 2014