Pacifico Company, a U.S.-based importer of beer and wine, purchased 2,000 cases of Oktoberfest-style beer...
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Pacifico Company, a U.S.-based importer of beer and wine, purchased 2,000 cases of Oktoberfest-style beer from a German supplier for 620,000 euros. Relevant U.S. dollar exchange rates for the euro are as follows: The company closes its books and prepares third-quarter financial statements on September 30. Assume that, on August 15, the company forecasted the purchase of beer on October 15 . On August 15, the company acquired a twomonth call option on 620,000 euros. The company designated the option as a cash value hedge of a forecasted foreign currency transaction. The time value of the option is excluded from the assessment of hedge effectiveness, and the change in time value is recognized in net income over the life of the option. Prepare journal entries to account for the foreign currency option and import purchase. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) Journal entry worksheet 2 4 5 6 7 8 9 Record the gain or loss on the foreign currency euro call option with a premium of $0.050 per Euro at a strike price of $1.55 and an exercise date of October 15. Note: Enter debits before credits. Pacifico Company, a U.S.-based importer of beer and wine, purchased 2,000 cases of Oktoberfest-style beer from a German supplier for 620,000 euros. Relevant U.S. dollar exchange rates for the euro are as follows: The company closes its books and prepares third-quarter financial statements on September 30. Assume that, on August 15, the company forecasted the purchase of beer on October 15 . On August 15, the company acquired a twomonth call option on 620,000 euros. The company designated the option as a cash value hedge of a forecasted foreign currency transaction. The time value of the option is excluded from the assessment of hedge effectiveness, and the change in time value is recognized in net income over the life of the option. Prepare journal entries to account for the foreign currency option and import purchase. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) Journal entry worksheet 2 4 5 6 7 8 9 Record the gain or loss on the foreign currency euro call option with a premium of $0.050 per Euro at a strike price of $1.55 and an exercise date of October 15. Note: Enter debits before credits
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Pacifico Company, a U.S.-based importer of beer and wine, purchased 2,000 cases of Oktoberfest-style beer from a German supplier for 620,000 euros. Relevant U.S. dollar exchange rates for the euro are as follows: The company closes its books and prepares third-quarter financial statements on September 30. Assume that, on August 15, the company forecasted the purchase of beer on October 15 . On August 15, the company acquired a twomonth call option on 620,000 euros. The company designated the option as a cash value hedge of a forecasted foreign currency transaction. The time value of the option is excluded from the assessment of hedge effectiveness, and the change in time value is recognized in net income over the life of the option. Prepare journal entries to account for the foreign currency option and import purchase. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) Journal entry worksheet 2 4 5 6 7 8 9 Record the gain or loss on the foreign currency euro call option with a premium of $0.050 per Euro at a strike price of $1.55 and an exercise date of October 15. Note: Enter debits before credits. Pacifico Company, a U.S.-based importer of beer and wine, purchased 2,000 cases of Oktoberfest-style beer from a German supplier for 620,000 euros. Relevant U.S. dollar exchange rates for the euro are as follows: The company closes its books and prepares third-quarter financial statements on September 30. Assume that, on August 15, the company forecasted the purchase of beer on October 15 . On August 15, the company acquired a twomonth call option on 620,000 euros. The company designated the option as a cash value hedge of a forecasted foreign currency transaction. The time value of the option is excluded from the assessment of hedge effectiveness, and the change in time value is recognized in net income over the life of the option. Prepare journal entries to account for the foreign currency option and import purchase. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) Journal entry worksheet 2 4 5 6 7 8 9 Record the gain or loss on the foreign currency euro call option with a premium of $0.050 per Euro at a strike price of $1.55 and an exercise date of October 15. Note: Enter debits before credits 