Refer to BE16-3. Assume the same facts except that the forward contract is a futures contract that trades on the Futures Exchange. Ginseng Inc. was required to deposit $25 with the stockbroker as a margin. Prepare the journal entries to update the books on January 1 and 15.
BE16-3
On January 1, 2014, Ginseng Inc. entered into a forward contract to purchase U.S. $5,000 for $5,280 Canadian in 30 days. On January 15, the fair value of the contract was $35 (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.