On December 1 of Year 1, Lorien Company made a credit sale to a Thai company. The

Question:

On December 1 of Year 1, Lorien Company made a credit sale to a Thai company. The amount of the sale was 100,000 Thai baht. Lorien will collect the account on January 1 of Year 2. On December 1, the was 40 Thai baht for 1 U.S. dollar. On December 1, Lorien entered into a futures contract to sell 100,000 Thai baht on January 1 of Year 2 at an of 40 Thai baht for 1 U.S. dollar. Make all journal entries necessary on December 31 of Year 1 in connection with both the account receivable and the futures contract, assuming that the for 1 U.S. dollar on December 31 is
(1) 50 Thai baht,
(2) 37 Thai baht, and
(3) 40 Thai baht.

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