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1. (25 pts) Shannon Company has agreed to buy on September 1, 2018 Inventory for...

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1. (25 pts) Shannon Company has agreed to buy on September 1, 2018 Inventory for delivery on March 1, 2019 from a German supplier. The cost of the equipment is 500,000 and the bill will be settled in Euros. The purchase qualfies as a firm purchase commitment, as a contract was signed on September 1, 2018. Shannon enters into a forward contract to buy the needed Euros on March 1 at the 180 day forward rate. Exchange rates for 1.0 Euro are as follows Spot 180 day forward 60 day forward Sep 1 $1.34 $1.38 $1.37 Dec 31 $1.39 $1.44 $1.40 March 1 $1.43 $1.45 $1.44 Record the entries need on September 1. Dr. Cr. Record the entries needed at year end, December 31. Dr. Cr. Record the entries need on March 1, including the purchase of the inventory. Dr. Cr. Assume instead that this is not a firm purchase commitment but rather an anticipated purchase. Record the entries needed at September 1. Dr. Cr. Record the entries needed at December 31. Assume that the inventory was never purchased. Record the entries needed on March 1

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