Prepare the entries on the dates listed

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Question - Early August Maker USA anticipated the purchase of inventory around October 2020 from a foreign company at a cost of 1,000,000 foreign currency units (FCU). On 8/10/2020, Maker paid $12,000 to purchase a call option to buy 1 million FCU at a strike price of $0.255 expiring end of year. On October 15, 2020, the option was settled and inventory purchased and paid.


08/10/2020

08/31/2020

09/30/2020

10/15/2020

Spot Rate

$0.253

$0.310

$0.362

$0.275

FV of Option

$12,000

$13,500

$10,000


Required - Prepare the entries on the dates listed (Maker prepared monthly financial statements).

Reference no: EM133140274

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