1.) Record the journal entries for the acquisition of the financial instrument in good form and submit this in a Microsoft Excel spreadsheet. (See spreadsheet)

 

 

 

 

 

 

11/1/201312/31/20131/31/2014     
Spot Rate$1.20$1.25$1.30     
Forward Rate$1.23$1.26$1.30     
         
HedgeCo is interested in purchasing 1,000 of Product Z from OverSeas Inc. HedgeCo is very concerned about two issues: 1) that the price of Product Z will change and 2) the exchange rate will make an unfavorable change before the purchase takes place.  Select a hedge and explain your selection. Use the exchange rates above to make your journal entry. Select appropriate account names for your journal entry.
Hedge Type 
Reasoning for Selection 
Journal EntryAccount NameDRCRDecscribe Financial Statement Effect of each account movement
      
      
      
      
    • 9 years ago
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