On March 1, 2017, Leach Company entered into a foreign exchange forward contract with Montclair...
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Accounting
On March 1, 2017, Leach Company entered into a foreign exchange forward contract with Montclair Bank to sell Euro 20,000 to be delivered on April 30. Assume that Leach prepares financial statements monthly. The bank exchange rates were shown below:
3-1-2017
3-31-2017
4-30-2017
Spot rate
Euro 1= US$1.15
Euro 1= US$1.13
Euro 1= US$1.12
Forward rate
30 days
60 days
90 days
Euro 1= US$1.18
Euro 1= US$1.20
Euro 1= US$1.21
Euro 1= US$1.17
Euro 1= US$1.19
Euro 1= US$1.20
Euro 1= US$1.15
Euro 1= US$1.17
Euro 1= US$1.18
How was this forward contract reported on Leachs March 31 balance sheet?
a. in the asset section
b. in the liability section
c. in the equity section
d. the forward contract was not reported on the balance sheet
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