Vanderbilt Clothing Company placed a clothing order with a company located in Taiwan. The order was placed on November 1, 2019, for delivery on May 1, 2020. Vanderbilt agreed to pay for the goods on May 1, 2020, with the delivery of 5,000,000 Taiwan dollars. To protect against fluctuations in the exchange rate, the company entered into a forward contract on November 1, 2019, to buy 5,000,000 Taiwan dollars on May 1, 2020, for $.02634 per unit. Direct exchange rates per Taiwan dollar on specific dates are as follows:

Required:

Prepare the journal entries to be made by Vanderbilt Clothing Company during 2019 and 2020 to account for the transactions described above.

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Forward Rate- Maturity May 1 $.02634 .02735 Date Spot Rate $.02631 November 1, 2019 December 31, 2019 May 1, 2020 .02740 .02591