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E810 Hedged Purchase Commitment and Exposed Liability Position, with Adjusting En- tries On November 20,...

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E810 Hedged Purchase Commitment and Exposed Liability Position, with Adjusting En- tries On November 20, 2020, International Foods, a U.S. company, agreed to purchase merchandise from a Hong Kong supplier at a price of HK$10,000,000. The merchandise will be delivered on January 10, 2021, and the amount owing is payable on April 10, 2021, in Hong Kong dollars. To hedge the ex- pected future payment, International entered a forward contract for purchase of HK$10,000,000 on April 10, 2021. On January 10, 2021, the merchandise was delivered as promised. On April 10, International closed the forward contract and used the Hong Kong dollars to pay its supplier. International's accounting year ends December 31. Exchange rates (S/HKS) are as follows: Forward rate for delivery April 10, 2021 Spot rate $0.1289 November 20, 2020 December 31, 2020. January 10, 2021 $0.1293 0.1304 0.1302 0.1303 Required Prepare the above journal entries International Foods made on January 10,2021 and April 10,2021 to record th ve transactions, as well as its end-of-year adjusting entries on December 31,2020

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