Scenario 10-2 On 4/1/X3, a U.S. Company Commits to Sell a Piece

Multiple Choice

Scenario 10-2
On 4/1/X3, a U.S. Company commits to sell a piece of equipment to a French customer. At that time, the U.S. company enters into a forward contract to sell foreign currency on 8/1/X3 (120 days) . Delivery will take place 7/1/X3 with payment due on 8/1/X3. The fiscal year end for the company is 6/30/X3. The sales price of the equipment is 200,000 Euros. Various exchange rates are as follows:
Discount rate is 12%.
-Refer to Scenario 10-2. What is the amount in the Firm Commitment account on 6/30/X3?

A) 4,000 debit
B) 8,000 debit
C) 4,000 credit
D) 10,000 credit