Constellation Brands, a U.S. company, purchases merchandise from a German supplier on a regular basis. On April 1, 2016. Constellation purchased 28,000 for delivery on June 30, 2016, in anticipation of an expected purchase of merchandise for 28,000 at the end of June. The forward contract was a qualified hedge of a forecasted transaction. Constellation took delivery of the merchandise, settled the forward contract, and paid the German supplier 28,000 on June 30, 2016. The merchandise was subsequently sold in the U.S. on July 12, 2016, for $38,000 in cash. Relevant exchange rates ($/) are as follows: Spot rate S1,31 Forward rate for delivery June 30, 2016 $1.79 April 1, 2016 June 30, 2016 Prepare the journal entries made by Constellation Brands on June 30 and July 12 concerning the above events. Assume Constellation Brands is a calendar-year company, and records cost of goods sold at the time of sale. Credit Debit 36,120 X 36,120 X 0 O OX General Journal Date Description 06/30/16 Investment in forward contract Other comprehensive income To record increase in fair value of forward contract Foreign currency Investment in forward contract Cash To record settlement of forward contract. - Inventory Foreign currency To record delivery of merchandise and payment to supplier 07/12/16 Cash Sales revenue . To record merchandise sale Other comprehensive income Cost of goods sold Inventory To record cost of sale. . OX 37,800 x 0 37,800 x Ox Ox OX