(a) On October 1, 2024, Queenie enters into a forward exchange contract to purchase NZ$8 million on March 31, 2025, at a predetermined rate of ¥4.22 to NZ$1. The journal entry for this transaction is as follows:
借:套期工具 - 外汇远期合同 33,760,000 (8,000,000 * 4.22) 贷:预付账款 - 外汇远期合同 33,760,000
(b) On December 31, 2024, the fair value of the forward exchange contract is ¥19.70 per NZ$1,000. The journal entry to record the change in fair value is:
借:套期工具 - 外汇远期合同 1,576,000 [(8,000,000 / 1,000) * (4.22 - 19.70)] 贷:公允价值变动损益 1,576,000
In Queenie's financial statements for the year ended December 31, 2024, the forward exchange contract would be reported as a liability under "Other liabilities" or a similar category, with a balance of the current fair value. The related account(s) would include the "Prepaid Forward Exchange Contract" and "Fair Value Through Profit or Loss" account.
(c) On March 31, 2025, when the factory is purchased for NZ$6 million and the forward contract is settled, the journal entries are:
Factory Purchase: 借:固定资产 - 工厂 25,180,000 (6,000,000 * 4.19) // Using the spot rate on March 31, 2025 贷:银行存款 - 人民币 25,180,000
Settlement of Forward Contract: 借:银行存款 - 人民币 25,200,000 (8,000,000 * 3.15) // Using the forward rate from the contract 贷:套期工具 - 外汇远期合同 25,200,000
Overall change to the Factory account considering the settlement of the forward contract and the purchase: The factory account remains at 25,180,000, as the forward contract is settled separately and does not directly impact the cost of the factory. The difference between the forward contract settlement and the actual purchase cost (25,200,000 - 25,180,000 = 20,000) would be recorded as a gain or loss on the forward contract, which would be recognized in the income statement.