What journal entry should eagle prepare on october

Assignment Help Financial Management

Reference no: EM131930251

On October 1, 2018, Eagle Company forecasts the purchase of inventory from a British supplier on February 1, 2019, at a price of 100,000 British pounds. On October 1, 2018, Eagle pays $1,800 for a three-month call option on 100,000 pounds with a strike price of $2.00 per pound. The option is considered to be a cash flow hedge of a forecasted foreign currency transaction. On December 31, 2018, the option has a fair value of $1,600. The following spot exchange rates apply: Date Spot Rate October 1, 2018 $2.00 December 31, 2018 $1.97 February 1, 2019 $2.01

(a) What journal entry should Eagle prepare on October 1, 2018?

Reference no: EM131930251

Questions Cloud

Domestic investment portfolio : Let us assume we are considering Vodafone and BP, two blue chip UK companies, to include in to our UK domestic investment portfolio.

How many payments will amortize the debt : If Nolan decides to pay an additional $90 per payment, how many payments will amortize the debt?

Requires several skills-perhaps some from previous sections : This problem is a complex financial problem that requires several skills, perhaps some from previous sections.

Identifying optimal financial structure of firm : Minimizing cost of capital involves identifying optimal financial structure of firm which means finding lowest cost structure of items such as account payable,

What journal entry should eagle prepare on october : What journal entry should Eagle prepare on October 1, 2018?

Expansion project-what is the project net present value : XYZ Corporation is considering an expansion project. What is the project’s net present value (NPV)?

What should be current stock price : The discount rate for a firm of this risk is 15 percent. What should be the current stock price?

Makes three types of draperies at two different locations : The Janie Gioffre Drapery Company makes three types of draperies at two different locations.

What is the net present value of the project : what is the Net Present Value (NPV) of the project?

User Account

All Pages