On November 16, 2019, a U Required
Prepare the U

Essay

On November 16, 2019, a U.K. company, with a December 31 year-end, enters a forward purchase contract for €100,000 to be delivered on June 30, 2020. The contract hedges a forecasted purchase of equipment from a German supplier. The forward is closed and the equipment purchased on June 30, 2020. The equipment has a 5-year life, and is straight-line depreciated, no residual value. The company follows IFRS. Following is information on exchange rates (£/€):
$$\begin{array} { | l | c | c | } \hline & \text { Spot Rate } & \begin{array} { c } \text { Forward Rate for } \\\text { June 30, 2020 Delivery }\end{array} \\\hline \text { November 16, 2019 } & £ 0.885 & £ 0.881 \\\hline \text { December 31, 2019 } & 0.889 & 0.890 \\\hline \text { June 30, 2020 } & 0.895 & 0.895 \\\hline\end{array}$$ Required
Prepare the U.K. company's journal entries to record the following events:
a. December 31, 2019 adjusting entry
b. June 30, 2020 adjusting entries and transactions
c. Equipment depreciation expense for 2020