What journal entries Goofy Ltd would have to prepare

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Question - On November 10, 2017 Goofy Ltd buys some inventory from a French supplier to be paid for in Euros (€) two months later on January 10, 2018. Payment was to be for €125,000. The spot rates for the €1 are as follows:

November 10, 2017, transaction date, spot rate was $1.07/ €1

December 31, 2017 balance date, spot rate was $1.09/€1

January 10, 2018, settlement date, spot rate was $1.05/€1.

Required - If Goofy Ltd does not hedge the transaction, please demonstrate what journal entries Goofy Ltd would have to prepare on the transaction date, balance date and settlement date?

Reference no: EM132771307

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