In early August Maker USA anticipated the purchase of inventory around October 2020 from a foreign company at a cost of 1,000,000 foreign currency units (FCU). On 8/10/2020, Maker paid $12,000 to purchase a call option to buy 1 million FCU at a strike price of $0.255 expiring end of year. On October 15, 2020, the option was settled and inventory was purchased and paid.

	08/10/2020	08/31/2020	09/30/2020	10/15/2020
Spot Rate	$0.253	$0.310	$0.362	$0.275
FV of Option	$12,000	$13,500	$10,000

Required: Prepare the entries on the dates listed (Maker prepared monthly financial statements).

Answer rating: 100% (QA)

Journal entry is the process of recording transaction m... View the full answer