Required Information [The following information applies to the questions displayed below.] Jon-Jan Restaurants purchased green rice, a special variety of rice, from China for 100,000 renminbi on November 1, 20X8. Payment is due on January 30, 20X9. On November 1, 20X8, the company also entered into a 90-day forward contract to purchase 100,000 renminbi. The forward contract is not designated as a hedge. The rates were as follows: Date November 1, 20X8 December 31, 20X8 January 30, 20X9 Spot Rate $ 0.120 0.124 0.127 Forward Rate $ 0.126 (90 days) 0.129 (30 days) Required: Select the correct answer for each of the following questions. 1. The entry on November 1, 20X8, to record the forward contract includes a: O debit to Foreign Currency Receivable from Exchange Broker, 100,000 renminbl. O debit to Foreign Currency Receivable from Exchange Broker, $12,600. O credit to Premium on Forward Contract, $600. O credit to Dollars Payable to Exchange Broker, $12,600.

Required Information [The following information applies to the questions displayed below.] Jon-Jan Restaurants purchased green rice, a special variety of rice, from China for 100,000 renminbi on November 1, 20X8. Payment is due on January 30, 20X9. On November 1, 20X8, the company also entered into a 90-day forward contract to purchase 100,000 renminbi. The forward contract is not designated as a hedge. The rates were as follows: Date November 1, 20X8 December 31, 20X8 January 30, 20X9 Spot Rate $ 0.120 0.124 0.127 Forward Rate $ 0.126 (90 days) 0.129 (30 days) Required: Select the correct answer for each of the following questions. 1. The entry on November 1, 20X8, to record the forward contract includes a: O debit to Foreign Currency Receivable from Exchange Broker, 100,000 renminbl. O debit to Foreign Currency Receivable from Exchange Broker, $12,600. O credit to Premium on Forward Contract, $600. O credit to Dollars Payable to Exchange Broker, $12,600.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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