Denizen Corporation
1. On December 1, 2008, Denizen Corporation entered into a 120-day forward contract to purchase 20,000 Canadian dollars (C$). Denizen%u2019s fiscal year ends on December 31. The forward contract was to hedge a firm commitment agreement made on December 1, 2008, to purchase electronic goods on January 30, 2009, with payment due on March 31, 2009. The derivative is designated as a fair value hedge. The direct exchange rates follow:
|
Date
|
Spot Rate
|
Forward Rate for March 31, 2009
|
|
December 1, 2008
|
0.940
|
0.944
|
|
December 31, 2008
|
0.945
|
0.947
|
|
January 30, 2009
|
0.943
|
0.943
|
|
March 31, 2009
|
0.941
|
|
Prepare all journal entries for Denizen Corporation.