| 01-11-2013 | 31-12-2013 | 31-01-2014 | Page 392 | |||||
| Spot Rate | $1.20 | $1.25 | $1.30 | |||||
| Forward Rate | $1.23 | $1.26 | $1.30 | |||||
| HedgeCo is interested in purchasing 1,000 of Product Z from OverSeas Inc. HedgeCo is very concerned about two issues: 1) that the price of Product Z will change and 2) the exchange rate will make an unfavorable change before the purchase takes place. Select a hedge and explain your selection. Use the exchange rates above to make your journal entry. Select appropriate account names for your journal entry. |
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| Hedge Type | ||||||||
| Reasoning for Selection | ||||||||
| Journal Entry | Account Name | DR | CR | Decscribe Financial Statement Effect of each account movement |
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