Question: On December 1 , 2 0 X 1 , Micro World Incorporation entered into a 1 2 0 - day forward contract to sell 1

On December 1,20X1, Micro World Incorporation entered into a 120-day forward contract to sell 100,000 Australian dollars (A$).
Micro World's fiscal year ends on December 31. The direct exchange rates follow:
Required:
Prepare all journal entries for Micro World Incorporated for the following independent situations:
The forward contract was to manage the foreign currency risks from the sale of furniture for A$100,000 on December 1,201,
with payment due on March 31,202. The forward contract is not designated as a hedge.
The forward contract was to hedge an anticipated sale of furniture on January 30. The sale took place on January 30 with
payment due on March 31,20X2. The derivative is designated as a cash flow hedge. The company uses the forward exchang
rate to measure hedge effectiveness.
The forward contract was for speculative purposes only.
On December 1,20X1, Micro World Incorporation entered into a 120-day forward

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