Crown Corporation, a United States Company, made a sale to a foreign customer on September 15,...
Crown Corporation, a United States Company, made a sale to a foreign customer on
September 15, 2018 in the amount of 100,000 FCU (foreign currency units). On the same
day, as a hedge, Crown entered into a forward contract that will require the company to trade
100,000 FCU for dollars on October 15.
The company closed its books and prepared financial statements on September 30.
Crown's customer paid its account on October 15, 2018, and the forward contract was
completed on that date.
The following currency rates applied:
Date Exchange Rate Forward Rate
Sept. 15 1 FCU = $0.54 1 FCU = $0.55
Sept. 30 1 FCU = $0.55 1 FCU = $0.54
Oct. 15 1 FCU = $0.52
Prepare the journal entries for Crown Corporation for these transactions.
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