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Part 1 On October 1,2024, Blue Truck Company purchased inventory from...

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Accounting

Part 1
On October 1,2024, Blue Truck Company purchased inventory from a British supplier at a price of 100,000 British pounds. On October 1,2024, Blue Truck pays $1,800 for a three-month call option on 100,000 pounds with a strike price of $2.04 per pound. The option is considered to be a cash flow hedge of a foreign currency transaction. On December 31,2024, the option has a fair value of $1,600. The following spot exchange rates apply:
Date Spot Rate
October 1,2024 $ 2.04
December 31,2024 $ 1.99
February 1,2025 $ 2.02
Use the journal entries given and find the values assuming Blue Truck uses a calendar year end.
Accounts Recievable
Sales
Foreign Exchange Gain/Loss
Accounts Recievable
OCI
Foreign Exchange Gain/Loss
Forward Contract
OCI
Foreign Exchange Gain/Loss
Accounts Recievable
OCI
Foreign Exchange Gain/Loss
Forward Contract
OCI
Foreign Currency
Accounts Receivable
Cash
Foreign Currency
Forward Contract

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