Reference no: EM132940465

Question - Laguna Grill a chain of seafood restaurants. On September 1, 2018, Laguna Grill determined that it will need to purchase 100, 000 kilos of tuna fish on January 1, 2020. Because of the volatile fluctuation in the price of tuna fish, on September 1, 2018, Laguna Grill negotiated a forward contract with a reputable financial institution for Laguna Grill to purchase 100, 000 kilos of tuna fish on January 1, 2020 at a price of P8,000,000 or P80 per kilo. The perpetual system is used. On December 31, 2018, the market price of tuna fish per kilo is P90 and on December 31, 2019 and January 1, 2020, the market price of tuna fish per kilo is P75. The appropriate discount rate is 12% and the present value of 1 at 12% foe one period is .893. Prepare all indicated entries for 2018, 2018 and 2020 to record the forward contract and the purchase of fish. The forward contract is designated as a cash flow hedge.