Need Accounting help with rex corporation

Rex Corporation, a U.S. firm with a calendar accounting year, agreed to buy a specially made truck from a Japanese firm for delivery on February 28, 2017 with payment due on that date. On the same date the agreement was signed, November 1, 2016, a forward contract due on February 28, 2017, was also signed to purchase 1,000,000 yen, the contract price of the truck. Exchange rates were as follows:

Date

Spot Rate

Forward Rate

11/1/16

$0.0076

$0.0078

12/31/16

$0.0081

$0.0080

2/28/17

$0.0085

$0.0085

Discount rate = 8%

Required:

Prepare the journal entries needed to properly reflect the purchase and forward contract through the end of the fiscal year.

 
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