foreign exchange/forward contract/hedging

Project Description:

prepare all journal entries, including adjusting entries, for june, july, august, and september to record the transaction and the forward contract. disregard any time value adjustments.

on june 1, hall co. purchased inventory from a foreign supplier at a price of 75,000 fcu. (fcu is "foreign currency units")
hall co. will make payment in three months on september 1.
on june 1, hall co. entered into a forward contract maturing on september 1 as a fair value hedge of its fcu liability.
hall co. closes its books to prepare interim financial statements on june 30 of each year.

date.............spot rate................forward rate**
june 1...........$ 0.90 .......................$ 0.95
june 30.........$ 0.93.......................$ 0.94
sept. 1...........$ 0.96

**forward rate is for a contract written on june 1 to mature on september 1.
Skills Required:
Project Stats: Edited

Price Type: Fixed

Project Budget: $10 to $20
Completed
Total Proposals: 5
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