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Exercise A-8 (Algo) Derivatives; foreign currency; cash flow hedge [LOA-4] Cleveland Company is a U.S. firm with a U.S. dollaComplete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the net settlement on June

Required 1 Required 2 Prepare the journal entries for the period January 1 to June 30, 2022, to record the forward contract,Journal entry worksheet < 1 2 3 4 5 6 To record the change in the fair value of the derivative. Note: Enter debits before creJournal entry worksheet To record the change in the fair value of the derivative. Note: Enter debits before credits. Date GenJournal entry worksheet To record the net cash settlement of the forward contract. Note: Enter debits before credits. GeneralJournal entry worksheet < 1 2 3 4 To record ¥48,000,000 in cash sales at the spot rate of ¥105/US $1.00. Note: Enter debits bJournal entry worksheet < 1 2 3 4 5 Transfer the gain on the hedge activity from OCI to earnings Note: Enter debits before cr

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Above question is about forward contract. We have to find out net settlement on June 30,2022 and preparation of journal entries for the period Jan 1 to June 30, 2022. Refer the below images for more detailed solution.

Solution : o calculation of the net settlement on June 30, 2022 : Particulars Amount & 4752 48 Deliver & and receive us at coPrepare the June 30, 2022 adjustments Journal entries for the , to record the forward for changes in fair value period Januar&18105 Other comprehensive income all Dr To sales Alc (Being to transfer the gain on the Ledge activity from one to earnings)

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