On October 1st.2019, the X Company of London, Ontario, Canada, received a purchase order to sell inventory

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Question:

On October 1st.2019, the X Company of London, Ontario, Canada, received a purchase order to sell inventory at a sales price of US$80,000 to Y Limited of New York, USA. The goods were delivered on November 15th.2019, with payment due on January 29th.2020. Both companies have December 31st. year ends. Exchange rates were as follows:-

Spot rate………………………Forward rate

October 1st.2019………………………………………………US$1 = C$ 1.08……………..US$1 = C$1.130

November 15th..2019……………………………………….US$1 = C$ 1.09……………..US$1 = C$1.124

December 31st..2019……………………………………….US$1 = C$ 1.10 ……………..US$1 = C$1.130

January 29th..2020…………………………………………..US$1 = C$ 1.12

Required:-

Assume that X entered into a forward contract as a fair value hedge of its accounts receivable balance on November 15th. 2019, prepare all journal entries required for 2019 and January 29th.2020.