Crane Company was incorporated in Delaware in 2017. On November 2, 2024, the controller of the...

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Crane Company was incorporated in Delaware in 2017. On November 2, 2024, the controller of the company entered into a forward contract to sell 36,000 British pounds for $1.5920 on March 1, 2025. The following exchange rates were quoted on the indicated dates: Spot Rate Forward Rate March 1 Delivery November 2, 2024 $1.6021 1.5920 December 31, 2024 1.5820 1.58 March 1, 2025 1.6543 Crane Company's fiscal year-end is December 31. (a) Assume that the forward contract was entered into as a hedge against an exposed foreign currency receivable balance in the amount of 36,000. Prepare the journal entries that would be made by Crane Company on the dates listed below. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Round answers to O decimal places, e.g. 5,125. List all debit entries before credit entries.) 1. November 2-to record the sale of the goods on account for 36,000 and to record the forward contract. December 31-to adjust the accounts related to the exposed asset and forward contract at fiscal year-end. 2. 3. March 1-to adjust the accounts related to the exposed asset and forward contract and to record the settlement of the receivable and delivery of the pounds to the exchange dealer. Date Account Titles and Explanation Debit Credit Crane Company was incorporated in Delaware in 2017. On November 2, 2024, the controller of the company entered into a forward contract to sell 36,000 British pounds for $1.5920 on March 1, 2025. The following exchange rates were quoted on the indicated dates: Spot Rate Forward Rate March 1 Delivery November 2, 2024 $1.6021 1.5920 December 31, 2024 1.5820 1.58 March 1, 2025 1.6543 Crane Company's fiscal year-end is December 31. (a) Assume that the forward contract was entered into as a hedge against an exposed foreign currency receivable balance in the amount of 36,000. Prepare the journal entries that would be made by Crane Company on the dates listed below. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Round answers to O decimal places, e.g. 5,125. List all debit entries before credit entries.) 1. November 2-to record the sale of the goods on account for 36,000 and to record the forward contract. December 31-to adjust the accounts related to the exposed asset and forward contract at fiscal year-end. 2. 3. March 1-to adjust the accounts related to the exposed asset and forward contract and to record the settlement of the receivable and delivery of the pounds to the exchange dealer. Date Account Titles and Explanation Debit Credit

Answer rating: 100% (QA)

1 November 2 Account Titles and Explanation Debit Credit Accounts Receivable 36000 Sales Revenue 360... View the full answer