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Commitment to sell wheat Dom Company, on September 5,2022, contracts to sell wheat for...

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Accounting

Commitment to sell wheat
Dom Company, on September 5,2022, contracts to sell wheat for 800,000 to For Company
The wheat will be delivered March 1,2023, and payment is
due April 1,2023. The year-end is December 31.
Dom Co. hedges the commitment right away and designates this as a cash flow hedge.
Dom Co. will account for the hedge using the gross method.
Rates:
Sept. 51=
sign contract
year-end
delivery date
settlement date
Dec. 311=
March 11=
Apr. 1,1=
spot rate forward rate
to April 1,2023
1.600,1.620
1.622
1.630
Required:
Required:
Prepare all journal entries related to the hedge and the underlying purchase or sale.
Use the gross method (record the hedge using a JE; not a memorandum entry)
Prepare journal entries in standard form.
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