Date U.S. Dollar per Canadian Dollar September 1, Year 1 $0.75 December 31, Year 1 0.73 March

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Date			U.S. Dollar per Canadian Dollar

September 1, Year 1			$0.75

December 31, Year 1			0.73

March 1, Year 2			0.71

Prepare journal entries for the option fair value hedge and the firm commitment and detail calculation for each journal entry and question.

2-What was the net impact on ABC Company's Year 2 income as a result of this fair value hedge of a firm commitment?

3-What was the net increase or decrease in cash flow from having purchased the foreign currency option to hedge this exposure to foreign exchange risk?

Related Book For answer-question

International Accounting

ISBN: 978-0077862206

4th edition

Authors: Timothy Doupnik, Hector Perera

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Posted Date: Apr 23, 2024 02:23 PM

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Date U.S. Dollar per Canadian Dollar September 1, Year 1 $0.75 December 31, Year 1 0.73 March

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To prepare journal entries for the fair value hedge and firm commitment lets first understand the scenario and calculations involved Lets assume ABC C... View the full answer

International Accounting

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