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23.     On November 18, 2006, when the selling spot rate for a foreign country's local currency unit (LCU) was LCU1 = $0.18, USC Company acquired a 30-day forward contract for LCU100,000 at the forward rate of LCU1 = $0.21. The contract was not designated as a hedge. On November 30, 2006, the end of the accounting period, the 12-day forward rate for the LCU was LCU1 = $0.22. On December 18, 2006, when USC paid the forward contract and received the LCUs, the selling spot rate was LCU1 = $0.23. The appropriate discount rate is 6%.
          Prepare journal entries (omit explanations) for USC Company on November 17 and 30 and December 17, 2006.

24.     On November 5, 2006, Transnational Company sold merchandise costing $500 to an Indian customer for 10,000 rupees (Rs). On December 5, 2006, Transnational received from the Indian customer a draft for Rs10,000, which it exchanged for U.S. dollars. Transnational closed its accounting records monthly and uses the perpetual inventory system. Selected spot exchange rates for the rupee were as follows:

Rs1 =




Nov. 5

Nov. 30

Dec. 5



Buying spot rate






Selling spot rate







Prepare journal entries related to the transaction with the Indian customer in the accounting records of Transnational Company.

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