On December 1, 2020 Barnum Company (a U.S. based company) entered into a three month...
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On December 1, 2020 Barnum Company (a U.S. based company) entered into a three month forward contract to purchase 1,000,000 ringgits on March 1, 2021. The following U.S. dollar ringgits exchange rates apply: Date 1-Dec-20 Forward Rate Spot Rate (3/1/21) $0.044 $0.042 $0.040 $0.037 $0.038 N/A 31-Dec-20 1-Mar-21 Barnum's incremental borrowing rate is 12 percent. The present value factor for two months an annual interest rate of 12% (1 percent per month is 9803) Required: Complete the necessary journal entries for each date assuming that the hedge is treated as a Fair Value Hedge
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