Problem
Monument Company (a U'S.-based company} ordered a machine costing €150'000 from a foreign supplier on January 15, when the spot rate was $1119 per €. A one-month forward contract was signed on that date to purchase €150,000 at a forward rate of$1.21. The forward contract is properly designated as a fair value hedge of the €150,000 firm commitment. On February 15, when the company receives the machine, the spot rate is $1.20. At what amount should Monument Company capitalize the machine on its books?