What amount should the payable be carried on primo books

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Primo Inc., a U.S. company, ordered parts costing 100,000 rupee from a foreign supplier on July 7 when the spot rate was $.025 per rupee. A one-month forward contract was signed on that date to purchase 100,000 rupee at a rate of $.027. The forward contract is properly designated as a fair value hedge of the 100,000 rupee firm commitment.

Problem 1: On August 7, when the parts are received, the spot rate is $.028. At what amount should the payable be carried on Primo's books?

Multiple Choice

Option 1: $2,000.00
Option 2: $2,100.00
Option 3: $2,500.00
Option 4: $2,700.00
Option 5: $2,800.00

Reference no: EM132920644

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