On December 15, 2001, star glass Co. entered into a 30-day forward contract to buy 10,000 yens at the forward rate of 1.50. 0n December 31, 2001, the forward rate was 1.25 and january 15,2002, the spot rate moved to 1.60. Provide the journal entries under each of the following scenarios: (a) the contract is settled by the actual purchase of yens; and (b) the contract is settled through net cash payment.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On December 15, 2001, star glass Co. entered into a 30-day forward contract to buy 10,000 yens at the forward rate of 1.50. 0n December 31, 2001, the forward rate was 1.25 and january 15,2002, the spot rate moved to 1.60. Provide the journal entries under each of the following scenarios: (a) the contract is settled by the actual purchase of yens; and (b) the contract is settled through net cash payment.

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