ara Corporation issued a promissory note denominated in foreign currency for the purchase made from a supplier in England on December 1, for a 60-day, 12% promissory note for 100,000 pounds, at a selling rate of 1FC to P65.50. On December 31, the selling spot rate is 1FC to P64.80. On January 30, the selling spot rate is 1FC to P65.45 On the settlement date, how much is the foreign exchange loss?

On December 1, Year 1, Triaxal Incorporation enters into a forward contract to sell one million Philippines pesos (PP) to its bank in exchange for Canadian dollars on March 1, Year 2, at the market rate for a 90-day forward contract of PP1=$0.0227. On December 31, Year 1, Triaxal’s year-end, the 60-day forward rate to sell Philippines pesos on March 1 is quoted at PP1=$0.0222. On March 1, Year 2, the currencies are exchanged when the spot rate is PP1=$0.0220. Required Prepare journal entries for speculative forward contract under Gross Method and Net Method.

On October 1, 2020, Mertag Company (a U.S.-based company) receives an order from a customer in Poland to deliver goods on January 31, 2021, for a price of 1,000,000 Polish zlotys (PLN). Mertag enters into a forward contract on October 1, 2020, to sell PLN 1,000,000 in four months (on January 31, 2021). U.S. dollar–Polish zloty exchange rates are as follows:   Date Spot Rate Forward Rate(to January 31, 2021) October 1, 2020 $ 0.25   $ 0.29   December 31, 2020   0.28     0.31   January 31, 2021   0.30     N/A       Mertag designates the forward contract as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is measured by referring to changes in the forward rate, and, therefore, forward points are included in assessing hedge effectiveness. Mertag must close its books and prepare financial statements on December 31. Discounting to present value can be ignored. Prepare journal entries for the foreign currency forward contract,…

On October 1, 2020, Mertag Company (a U.S.-based company) receives an order from a customer in Poland to deliver goods on January 31, 2021, for a price of 1,030,000 Polish zlotys (PLN). Mertag enters into a forward contract on October 1, 2020, to sell PLN 1,030,000 in four months (on January 31, 2021). U.S. dollar–Polish zloty exchange rates are as follows:   Date Spot Rate Forward Rate(to January 31, 2021) October 1, 2020 $ 0.26   $ 0.30   December 31, 2020   0.29     0.33   January 31, 2021   0.31     N/A       Mertag designates the forward contract as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is measured by referring to changes in the forward rate, and, therefore, forward points are included in assessing hedge effectiveness. Mertag must close its books and prepare financial statements on December 31. Discounting to present value can be ignored.   Determine the net benefit, if any, realized by Mertag from entering…