Excelsior Builders, a U.S. Based Corporation ordered a machine from a London Manufacturing Company on January 15, 2020 costing 100,000 Pounds Sterling when the spot rate was $1.20 per Pound. A one month forward contract was signed on that date to purchase 100,000 Pounds Sterling at a forward rate of $1.23 per Pound. The forward contract is properly designated as a fair value hedge of the 100,000 Pounds Sterling firm commitment for the machine. Excelsior receives the machine on February 15 and at that time the spot rate is $1.22. At what amount should Excelsior capitalize this asset on its books? Defend your answer.

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