Prepare all necessary journal entries with brief explanation

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Reference no: EM13143467

ABC Company sold pharmaceutical products to a Swedish company for Swedish Kronor, SKr 200,000 on April 20, with a setllement date 60 days in the furure, June 19. On the date of the sale, April 20, ABC entered into a 60-day forward contract to sell SKr 200,000 in order to manage its foreign currency risk.

The rates are as follows:

April 20: 1SKr = US$ 0.180 spot and US$ 0.177 forward 60 day rate
June 19: 1SKr = US$ 0.175 spot

INSTRUCTIONS

Prepare all necessary journal entries with brief explanation, related to this transction. Show all calculations.

Reference no: EM13143467

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