Question: On February 1 Year 3 Harrier Ltd a Canadian company

On February 1, Year 3, Harrier Ltd., a Canadian company, sold goods to a company in a foreign country and took a note receivable for FF6,200,000. The note matures on February 1, Year 5, and bears interest at the market rate of 6%, payable annually. There was no danger of default on the note, but Harrier decided to hedge the cash receivable from the note with a forward contract. The contract was for one year and matured on February 1, Year 4. On that date, Harrier settled the forward contract and decided to leave the note in an unhedged position for the remainder of its life. Hedge accounting is not applied.
Harrier has a December 31 year-end.
Prepare all the journal entries related to the note receivable for Years 3 and 4.

Sale on SolutionInn
  • CreatedJune 09, 2015
  • Files Included
Post your question