On November 1, 2017, American Company Sold Inventory to a Foreign

Multiple Choice

On November 1, 2017, American Company sold inventory to a foreign customer. The account will be settled on March 1 with the receipt of $500,000 foreign currency units (FCU) . On November 1, American also entered into a forward contract to hedge the exposed asset. The forward rate is $0.70 per unit of foreign currency. American has a December 31 fiscal year-end. Spot rates on relevant dates were: The entry to record the forward contract is

A) FCU Receivable, 350,000; Premium on Forward Contract, 15,000; Dollars Payable, 365,000
B) Dollars Receivable, 365,000; Discount on Forward Contract, 15,000; FCU Payable, 350,000
C) FCU Receivable, 365,000; Discount on Forward Contract, 15,000; Dollars Payable, 350,000
D) Dollars Receivable, 350,000; Discount on Forward Contract, 15,000; FCU Payable, 365,000