Triple A Company, a U.S.-based company, purchased equipment from Germany for 15,000 Euro on December 16, 2023. The sales term was FOB shipping (i.e., ownership is transferred to Triple A Company upon shipping). The equipment was shipped on December 16, 2023. The payment was due on February 14, 2024. 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, 2023, is Euro 1 = $1.21. The spot rate on February 14, 2024 was Euro 1=$1.24. 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", "Accounts payable", "Equipment", "Forward contract", "Unrealized holding gain/loss-OCI", "Firm commitment"]	[ Select ] ["450", "750", "300"]
Cr.	[ Select ] ["Unrealized holding gain/loss-OCI", "Unrealized holding gain/loss", "Firm commitment", "Equipment", "Forward contract"]	Intended to be blank

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

February 14, 2024

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

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

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