Problems Chapter $121.$ Maloney Corporation has decided to speculate on the foreign exchange market, and has entered into a $6-$month forward contract to sell $250,000$ Mexican pesos. When the forward contract was acquired on October $1,2012,$ the spot rate for the peso was $\backslash (\backslash$$ $0\mathrm{.}1601\backslash )$ and the $6-$month future was $\backslash (\backslash$$ $0\mathrm{.}1639\backslash ).$ On December $31,2012,$ the spot rate was $\backslash (\backslash$$ $0\mathrm{.}1616\backslash )$ and the future rate was $\backslash (\backslash$$ $0\mathrm{.}1607\backslash ).$ On April $1,2013,$ the spot rate was $\backslash (\backslash$$ $0\mathrm{.}1650\backslash ).$ Forward Rate Spot Rate $\backslash$begin$\{$tabular$\}\{$lll$\}\backslash (10/1/12\backslash )$ & $0\mathrm{.}1601$ & $0\mathrm{.}1639\backslash \backslash \backslash (12/31/12\backslash )$ & $0\mathrm{.}1616$ & $0\mathrm{.}1607\backslash \backslash \backslash (4/1/13\backslash )$ & $0\mathrm{.}1650$ & $\backslash$end$\{$tabular$\}$ A $.$ Prepare the necessary journal entries to record the forward contract B$.$ Calculate the total gain or loss on the speculative hedge $\backslash$begin$\{$tabular$\}\{|$l$|$l$|$l$|$l$|$l$|$l$|\}\backslash$hline $\backslash$multicolumn$\{6\}\{|$c$|\}\{$Journal$\}\backslash \backslash \backslash$hline $\backslash$multicolumn$\{6\}\{|$c$|\}\{\}\backslash \backslash \backslash$hline $\backslash (\backslash$square $\backslash )$ & & & & & $\backslash \backslash \backslash$hline & & & & & $\backslash \backslash \backslash$hline & & & & & $\backslash \backslash \backslash$hline $\backslash$multicolumn$\{6\}\{|$c$|\}\{\}\backslash \backslash \backslash$hline $\backslash (\backslash$square $\backslash )$ & & & & & $\backslash \backslash \backslash$hline $\backslash (\backslash$square $\backslash )$ & & & & & $\backslash \backslash \backslash$hline $\backslash$multicolumn$\{6\}\{|$c$|\}\{\}\backslash \backslash \backslash$hline $\backslash (\backslash$square $\backslash )$ & & & & & $\backslash \backslash \backslash$hline & & & & & $\backslash \backslash \backslash$hline $\backslash$multicolumn$\{6\}\{|$c$|\}\{\}\backslash \backslash \backslash$hline $\backslash (\backslash$square $\backslash )$ & & & & & $\backslash \backslash \backslash$hline & & & & & $\backslash \backslash \backslash$hline $\backslash$multicolumn$\{6\}\{|$c$|\}\{\}\backslash \backslash \backslash$hline $\backslash (\backslash$square $\backslash )$ & & & & $\backslash (\backslash$square $\backslash )$ & $\backslash \backslash \backslash$hline & & & & & $\backslash \backslash \backslash$hline & & & & & $\backslash \backslash \backslash$hline & & & & & $\backslash \backslash \backslash$hline & & & & & $\backslash \backslash \backslash$hline $\backslash$end$\{$tabular$\}$