1. On December 1, 2008, Denizen Corporation entered into a 120 day forward contract to purchase 20,000 Canadian dollars (C$). Denizen%u2019s fiscal year ends on December 31. The forward contract was to hedge a firm commitment agreement made on December 1, 2008, to purchase electronic goods on January 30, 2009, with payment due on March 31, 2009. The derivative is designated as a fair value hedge. The direct exchange rates follow:
|
Date |
Spot Rate |
Forward Rate for March 31, 2009 |
|
December 1, 2008 |
0.940 |
0.944 |
|
December 31, 2008 |
0.945 |
0.947 |
|
January 30, 2009 |
0.943 |
0.943 |
|
March 31, 2009 |
0.941 |
Prepare all journal entries for Denizen Corporation