Business, 09.12.2019 18:31 nuggetslices

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?

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On october 1, 2018, eagle company forecasts the purchase of inventory from a british supplier on feb...

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