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On October 1, 2016, Kill Company shipped equipment to a foreign customer for a foreign...

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Accounting

On October 1, 2016, Kill Company shipped equipment to a foreign customer for a foreign currency (FC) price of FC 3,000,000 due on January 31, 2017. All revenue realization criteria were satisfied and accordingly the sale was recorded by Kill Company on October 1. Simultaneously, Kill entered into a forward contract to sell 3,000,000 FCU on January 31, 2017 for $1,200,000. Payment was received from the foreign customer on January 31, 2017. Spot rates on October 1, December 31, and January 31 were $0.42, $0.425, and $0.435, respectively. Kill amortizes all premiums and discounts on forward contracts and closes its books on December 31.

Required: Prepare all journal entries relative to the above to be made by Kill during 2016 and 2017.

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