Question: On June 1, Alexander Corporation sold goods to a foreign customer at a price of 1,190,000 pesos and will receive payment in three months on

months on September 1. On June 1, Alexander acquired an option to

sell 1,190,000 pesos in three months at a strike price of $0.055.

Relevant exchange rates and option premiums for the peso are as follows:DateSpot

RatePut Option Premiumfor September 1(strike price $0.055)June 1$0.055$0.0030June 300.0610.0022September 10.053N/AAlexander must close

its books and prepare its second-quarter financial statements on June 30.a-1.Assuming that

Alexander designates the foreign currency option as a cash flow hedge of

a foreign currency receivable, prepare journal entries for these transactions in U.S.

dollars.a-2.What is the impact on net income over the two accounting periods?b-1.Assuming

that Alexander designates the foreign currency option as a fair value hedge

of a foreign currency receivable, prepare journal entries for these transactions in

U.S. dollars.b-2.What is the impact on net income over the two accounting

periods? Opera File Edit View History Bookmarks Developer Window Help 94% [4

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On June 1, Alexander Corporation sold goods to a foreign customer at a price of 1,190,000 pesos and will receive payment in three months on September 1. On June 1, Alexander acquired an option to sell 1,190,000 pesos in three months at a strike price of $0.055. Relevant exchange rates and option premiums for the peso are as follows:

DateSpot RatePut Option Premium

for September 1

(strike price $0.055)June 1$0.055$0.0030June 300.0610.0022September 10.053N/A

Alexander must close its books and prepare its second-quarter financial statements on June 30.

a-1.Assuming that Alexander designates the foreign currency option as a cash flow hedge of a foreign currency receivable, prepare journal entries for these transactions in U.S. dollars.
a-2.What is the impact on net income over the two accounting periods?
b-1.Assuming that Alexander designates the foreign currency option as a fair value hedge of a foreign currency receivable, prepare journal entries for these transactions in U.S. dollars.
b-2.What is the impact on net income over the two accounting periods?

Homework Hel| J SECTION 44-5 | + eBook 8 . . .

. . Print Record the sale of merchandise. E References Note: Enter

debits before credits. Date General Journal Debit Credit 06/01 Accounts receivable (P)

65,450 Sales 65,450 Record entry Clear entry View general journal MC Graw

Hill 29 4 W POpera File Edit View History Bookmarks Developer Window

Help 94% [4 : Sun Sep 29 10:39:55 PM Q Transactions New

Western Ac grademiners.con Defy Florence - Terms of Service Waivers LG Home

- Looking G On June 1, Alexa | G On June 1,

Alexa Ch 7 Homework Homework Help eBook Print Record the foreign currency

option. E References Note: Enter debits before credits. Date General Journal Debit

Credit 06/01 Accounts receivable (P) Foreign exchange gain Record entry Clear entry

View general journal MC Graw Hill 29 4 W POpera File Edit

View History Bookmarks Developer Window Help 94% [4 : Sun Sep 29

10:39:57 PM Q Transactions New Western Ac grademiners.con Defy Florence - Terms

of Service Waivers LG Home - Looking G On June 1, Alexa

| G On June 1, Alexa Ch 7 Homework Homework Help eBook

2 3 4 Print Record the entry for changes in the exchange

rate. E References Note: Enter debits before credits. Date General Journal Debit

Credit 06/30 Foreign exchange loss Accounts receivable (P) Record entry Clear entry

Opera File Edit View History Bookmarks Developer Window Help 94% [4 8 Sun Sep 29 10:39:48 PM Q = Transactions New Western grademiners.c Defy Florence Terms of Servi Waivers LG Home - Lookin | G On June 1, Ale: G On June 1, Ale Ch 7 Homewor Homework Hel| J SECTION 44-5 | + eBook 8 . . . . . Print Record the sale of merchandise. E References Note: Enter debits before credits. Date General Journal Debit Credit 06/01 Accounts receivable (P) 65,450 Sales 65,450 Record entry Clear entry View general journal MC Graw Hill 29 4 W POpera File Edit View History Bookmarks Developer Window Help 94% [4 : Sun Sep 29 10:39:55 PM Q Transactions New Western Ac grademiners.con Defy Florence - Terms of Service Waivers LG Home - Looking G On June 1, Alexa | G On June 1, Alexa Ch 7 Homework Homework Help eBook Print Record the foreign currency option. E References Note: Enter debits before credits. Date General Journal Debit Credit 06/01 Accounts receivable (P) Foreign exchange gain Record entry Clear entry View general journal MC Graw Hill 29 4 W POpera File Edit View History Bookmarks Developer Window Help 94% [4 : Sun Sep 29 10:39:57 PM Q Transactions New Western Ac grademiners.con Defy Florence - Terms of Service Waivers LG Home - Looking G On June 1, Alexa | G On June 1, Alexa Ch 7 Homework Homework Help eBook 2 3 4 Print Record the entry for changes in the exchange rate. E References Note: Enter debits before credits. Date General Journal Debit Credit 06/30 Foreign exchange loss Accounts receivable (P) Record entry Clear entry View general journal MC Graw Hill 29 4 W POpera File Edit View History Bookmarks Developer Window Help 94% [4 : Sun Sep 29 10:40:00 PM Q Transactions New Western Ac grademiners.con Defy Florence - Terms of Service Waivers LG Home - Looking G On June 1, Alexa | G On June 1, Alexa Ch 7 Homework Homework Help eBook 3 4 5 6 7 Print Record the change in the fair value of the option. E References Note: Enter debits before credits. Date General Journal Debit Credit 06/30 Record entry Clear entry View general journal MC Graw Hill 29 4 W POpera File Edit View History Bookmarks Developer Window Help 94% [4 : Sun Sep 29 10:40:02 PM Q Transactions New Western Ac grademiners.con Defy Florence - Terms of Service Waivers LG Home - Looking G On June 1, Alexa | G On June 1, Alexa Ch 7 Homework Homework Help eBook .... Print Record the gain or loss on the option. E References Note: Enter debits before credits. Date General Journal Debit Credit 06/30 Record entry Clear entry View general journal MC Graw Hill 29 4 W POpera File Edit View History Bookmarks Developer Window Help 94% [4 8 Sun Sep 29 10:40:04 PM Q Transactions New Western Ac grademiners.con Defy Florence - Terms of Service Waivers LG Home - Looking G On June 1, Alexa | G On June 1, Alexa Ch 7 Homework Homework Help Print Record the option expense. E References Note: Enter debits before credits. Date General Journal Debit Credit 06/30 Record entry Clear entry View general journal MC Graw Hill 29 4 W POpera File Edit View History Bookmarks Developer Window Help 94% [4 : Sun Sep 29 10:40:06 PM Q Transactions New Western Ac grademiners.con Defy Florence - Terms of Service Waivers LG Home - Looking G On June 1, Alexa | G On June 1, Alexa Ch 7 Homework Homework Help Print Record the entry for changes in the exchange rate. E References Note: Enter debits before credits. Date General Journal Debit Credit 09/01 Record entry Clear entry View general journal MC Graw Hill 29 4 W POpera File Edit View History Bookmarks Developer Window Help 94% [4 8 Sun Sep 29 10:40:08 PM Q Transactions New Western Ac grademiners.con Defy Florence - Terms of Service Waivers LG Home - Looking G On June 1, Alexa | G On June 1, Alexa Ch 7 Homework Homework Help eBook 3 4 5 8 3.......... Print Record the change in the fair value of the option. E References Note: Enter debits before credits. Date General Journal Debit Credit 09/01 Record entry Clear entry View general journal MC Graw Hill 29 4 W POpera File Edit View History Bookmarks Developer Window Help 94% [4 : Sun Sep 29 10:40:11 PM Q Transactions New Western Ac grademiners.con Defy Florence - Terms of Service Waivers LG Home - Looking G On June 1, Alexa | G On June 1, Alexa Ch 7 Homework Homework Help 29 4 W POpera File Edit View History Bookmarks Developer Window Help 94% [4 : Sun Sep 29 10:40:13 PM Q Transactions New Western Ac grademiners.con Defy Florence - Terms of Service Waivers LG Home - Looking G On June 1, Alexa | G On June 1, Alexa Ch 7 Homework Homework Help 29 4 W POpera File Edit View History Bookmarks Developer Window Help 94% [4 : Sun Sep 29 10:40:15 PM Q Transactions New Western Ac grademiners.con Defy Florence - Terms of Service Waivers LG Home - Looking G On June 1, Alexa | G On June 1, Alexa Ch 7 Homework Homework Help eBook Print Record receipt of pesos. E References Note: Enter debits before credits. Date General Journal Debit Credit 09/01 Record entry Clear entry View general journal MC Graw Hill 29 4 W POpera File Edit View History Bookmarks Developer Window Help 94% [4 : Sun Sep 29 10:40:16 PM Q Transactions New Western Ac grademiners.con Defy Florence - Terms of Service Waivers LG Home - Looking G On June 1, Alexa | G On June 1, Alexa Ch 7 Homework Homework Help 29 4 W POpera File Edit View History Bookmarks Developer Window Help 94% [4 8 Sun Sep 29 10:40:21 PM Q Transactions New Western Ac grademiners.con Defy Florence - Terms of Service Waivers LG Home - Looking G On June 1, Alexa | G On June 1, Alexa Ch 7 Homework Homework Help MC Graw Hill Education 29 A w POpera File Edit View History Bookmarks Developer Window Help 94% [4 : Sun Sep 29 10:40:25 PM Q Transactions New Western Ac grademiners.con Defy Florence - Terms of Service Waivers LG Home - Looking G On June 1, Alexa | G On June 1, Alexa Ch 7 Homework Homework Help 29 4 w POpera File Edit View History Bookmarks Developer Window Help 94% [4 8 Sun Sep 29 10:40:37 PM Q Transactions New Western Ac grademiners.con Defy Florence - Terms of Service Waivers LG Home - Looking G On June 1, Alexa | G On June 1, Alexa Ch 7 Homework Homework Help 29 4 w POpera File Edit View History Bookmarks Developer Window Help 94% [4 : Sun Sep 29 10:40:39 PM Q Transactions New Western Ac grademiners.con Defy Florence - Terms of Service Waivers LG Home - Looking G On June 1, Alexa | G On June 1, Alexa Ch 7 Homework Homework Help 29 4 w POpera File Edit View History Bookmarks Developer Window Help 94% [4 : Sun Sep 29 10:40:41 PM Q Transactions New Western Ac grademiners.con Defy Florence - Terms of Service Waivers LG Home - Looking G On June 1, Alexa | G On June 1, Alexa Ch 7 Homework Homework Help 29 4 w POpera File Edit View History Bookmarks Developer Window Help 94% [4 8 Sun Sep 29 10:40:43 PM Q Transactions New Western Ac grademiners.con Defy Florence - Terms of Service Waivers LG Home - Looking G On June 1, Alexa | G On June 1, Alexa Ch 7 Homework Homework Help 29 4 w POpera File Edit View History Bookmarks Developer Window Help 94% [4 : Sun Sep 29 10:40:45 PM Q Transactions New Western Ac grademiners.con Defy Florence - Terms of Service Waivers LG Home - Looking G On June 1, Alexa | G On June 1, Alexa Ch 7 Homework Homework Help 29 4 w POpera File Edit View History Bookmarks Developer Window Help 94% [4 8 Sun Sep 29 10:40:47 PM Q Transactions New Western Ac grademiners.con Defy Florence - Terms of Service Waivers LG Home - Looking G On June 1, Alexa | G On June 1, Alexa Ch 7 Homework Homework Help 29 4 w P

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