Q:$2$

On December $1,2007,$ a US firm sell $100$ units of inventory for a French firm for $200,000$ to be received on March $1,2008.$

the firm's fiscal year$-$end is December $31.$

On December $1,2007,$ the US firm entered into a forward contract to sell $200,000$ on March $1,2008,$ for $$1\mathrm{.}052.$

The spot rates for euros at various times are as follows:

Spot rate Forward rates

$($for March $1,2008)$

December $1,2007$

$1=$$$1\mathrm{.}05,1=$$$1\mathrm{.}052$

December $31,2007$

$1=$$$1\mathrm{.}055,1=$$$1\mathrm{.}06$

March $1,2008$

$1=$$$1\mathrm{.}07$

$1=$$$1\mathrm{.}07$

Instructions:

Prepare the journal entry$($ies$)$ to record the transactions in the US firm.