On November 1st 2017 The USA Company sold merchandise to the Paris Company for 1,000,000 Euros when the Euro was worth $1 The Paris Company will pay for the merchandise on May 1, 2018 On...
| On November 1st 2017 The USA Company sold merchandise to the Paris Company for 1,000,000 Euros when the Euro was worth $1 | |||||||||||
| The Paris Company will pay for the merchandise on May 1, 2018 | |||||||||||
| On November 1st The USA Company took out a forward contract to sell 1,000,000 Euros on May 1 2018 for $1.09 each | |||||||||||
| The USA Company borrows at 12% and the present value of a dollar at 12% is .94340 | |||||||||||
| On December 31, the Euro was worth $1.04 | |||||||||||
| On May 1 the Euro was worth $1.15 | |||||||||||
| ON May 1 Paris Company paid USA Company and USA Company turned over the Euros to its bank to satisfy its forward contract | |||||||||||
| Required: | Make the necessary journal entries of the USA Company beginning with the sale of the merchandise and ending with | ||||||||||
| the transfer of the Euros to their bank in exchange for the dollars to satsify the forward contract. | |||||||||||
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On November 1st 2017 The USA Company sold merchandise to the Paris Company for 1,000,000 Euros when the Euro was worth $1 The Paris Company will pay for the merchandise on May 1, 2018 On...
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