Dante Ltd. manufactures and distributes transmissions to various companies in Europe. On April 2, 2013, Dante entered into a sales contract with a company in Germany to sell 1,000 transmissions. The contract price is €2,000 per transmission. Five hundred transmissions are to be delivered on June 30, 2013 and the remaining half is to be delivered on December 20, 2013. Payment is due in two instalments with half due on August 31, 2013 and the remaining half due January 30, 2014. However, the customer has the right to cancel the contract with 30 days' notice.
On April 2, 2013 Dante entered into a forward contract to hedge against the Euro exchange rate for €1 million coming due on January 31, 2014. Dante has a December 31 year end.
Delivery of the transmissions occurred on the dates specified and the company collected the receivables due and settled the forward contract January 30, 2014.
The exchange rates were as followed:

\begin{array} { | l | c | c | } \hline & & \text { Forward rate to January 30, } \\\text { Canadian equivalent of euro } & \text { Spot rate } & 2014 \\\hline \text { Apri1 } 2,2013 & 1.50 & 1.54 \\\hline \text { June 30,2013 } & 1.51 & 1.57 \\\hline \text { August 31, 2013 } & 1.53 & 1.58 \\\hline \text { December 20,2013 } & 1.55 & 1.56 \\\hline \text { December 31,2013 } & 1.54 & 1.55 \\\hline \text { January 30, 2014 } & 1.56 & \text { settled } \\\hline\end{array}

Required:
Assume that the forward contract is designated as a cash flow hedge since the sale is highly probable. Prepare the journal entries to record the sales and the hedge. Dante reports under IFRS.

In Order to Identify the Foreign Exchange Component of a Transaction

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