E 13-4 Hedging of an existing asset Pattay Corporation purchases 200,000 pounds of copper on September 1, 2016, at $2 per pound. In order to hedge the value of the copper, on October 1, 2016, Pattay enters into a forward contract to sell the 200,000 pounds on January 31, 2017, at $2.3 per pound. The contract is settled net. Assume an appropriate interest rate of 8 percent. Sales price at each of the corresponding dates is given below:

Accounting for Derivatives and Hedging Activities 467 Copper price October 1, 2016 $1.8 December 31, 2016 $2.8 January 31, 2017 $2.5 REQuIRED: Prepare the journal entries to record the transactions at each of the corresponding dates.