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Based on past experience, Maas Corp. (a U.S.-based company) expects to purchase raw materials from a foreign supplier at a cost of 1,000,000 francs on March 15, 2021 To hedge this forecasted transaction, on December 15, 2020, the company acquires a call option to purchase 1,000,000 francs in three months. Maas selects a strike price of $0.69 per franc when the spot rate is $0.69 and pays a premium of $0.001 per franc. The spot rate increases to $0.697 at December 31, 2020, causing the fair value of the option to increase to $7,500. By March 15, 2021, when the raw materials are purchased the spot rate has climbed to $0.71, resulting in a fair value for the option of $20,000. The raw materials are used in assembling finished products, which are sold by December 31, 2021, when Maas prepares its annual financial statements Req A Req Band Prepare all journal entries for the option hedge of a forecasted transaction and for the purchase of raw materials. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 9 10 > Record purchase of foreign currency option as an asset. Reg A Reg B and a Prepare all journal entries for the option hedge of a forecasted transaction and for the purch for a transaction/event, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet 5 7 8 9 10 Record entry for order placed with foreign suppliers Req A Reg B and c Prepare all journal entries for the option hedge of a forecasted transaction and for the purchase of ra for a transaction/event, select "No journal entry required in the first account fleld.) View transaction list Journal entry worksheet 1 2 5 8 10 Record the entry to recognize the increase in the value of the foreign currency option. Req A Req B and C Prepare all journal entries for the option hedge of a forecasted transaction and for the purchase for a transaction/event, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet Record the exercise of foreign currency option. Req A Req B and C Prepare all journal entries for the option hedge of a forecasted transaction and for the purchase of for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet

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