On January 1, 2023, Ginseng Inc. entered into a forward contract to purchase U.S. $6,000 for CAD
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On January 1, 2023, Ginseng Inc. entered into a forward contract to purchase U.S. $6,000 for CAD $6,336 in 30 days. On January 15, the fair value of the contract was $40 (reflecting the present value of the future cash flows under the contract). Assume that the company would like to update its records on January 15.
(a) Prepare only the necessary journal entries on January 1 and 15, 2023.
(b) Explain which financial risks the transaction exposes the entity to.
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Related Book For
Intermediate Accounting Volume 2
ISBN: 9781119740445
13th Canadian Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
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