Triple A Company, a U.S.-based company, planned to order equipment from Germany on December 16, 2023, with payment due on February 14, 2024 when the equipment was delivered. The cost of the equipment was expected to be 15,000 Euro. Triple A was concerned Euro would appreciate between December 16, 2023 and February 14, 2024. Therefore, on December 16, 2023, Triple A also acquired a 60-day forward contract to purchase Euro at a forward rate of Euro 1 = $1.19. On December 16, 2023, the forward rate for an exchange on February 14, 2024, is Euro 1 = $1.19. On December 31, 2023, the forward rate for an exchange on February 14, 2024, is Euro 1 = $1.24. The spot rate on February 14, 2024 was Euro 1=$1.21. Should Triple A classify the hedge as a cash flow hedge or a fair value hedge? Prepare the appropriate entry on December 31, 2023 and February 14, 2024.

Triple A should classify the hedge as a [ Select ] ["cash flow hedge", "fair value hedge"]

December 31, 2023

	Account	Amount
Dr.	[ Select ] ["Unrealized holding gain/loss-OCI", "Equipment", "Forward contract", "Unrealized holding gain/loss", "Accounts payable", "Firm commitment"]	[ Select ] ["750", "300", "450"]
Cr.	[ Select ] ["Accounts payable", "Firm commitment", "Equipment", "Unrealized holding gain/loss", "Unrealized holding gain/loss-OCI", "Forward contract"]	Intended to be blank

February 14, 2024

	Account	Amount
Dr.	[ Select ] ["Forward contract", "Equipment", "Unrealized holding gain/loss-OCI", "Unrealized holding gain/loss", "Accounts payable", "Firm commitment"]	[ Select ] ["450", "750", "300"]
Cr.	[ Select ] ["Unrealized holding gain/loss", "Firm commitment", "Forward contract", "Accounts payable", "Unrealized holding gain/loss-OCI", "Equipment"]	Intended to be blank

	Account	Amount
Dr.	[ Select ] ["Equipment", "Forward contract", "Firm commitment", "Accounts payable", "Unrealized holding gain/loss-OCI", "Unrealized holding gain/loss"]	[ Select ] ["17,850", "18,600", "18,150"]
Cr.	Cash	[ Select ] ["17,850", "18,600", "18,150"]
Cr.	[ Select ] ["Forward contract", "Firm commitment", "Unrealized holding gain/loss", "Unrealized holding gain/loss-OCI", "Equipment", "Accounts payable"]	[ Select ] ["300", "750", "450"]