5 Based on past experience, Leickner Company expects to purchase raw materials from a foreign supplier at a cost of 1800,000 marks on March 15, 2018. To hedge this forecasted transaction, the company acquires a three-month call option to purchase 1,800,000 marks on December 15, 2017. Leickner selects a strike price of $0.77 per mark, paying a premium of $0.001 per unit, when the spot rate is $0.77. The spot rate increases to $0.773 at December 31, 2017, causing the fair value of the option to increase to $6,500. By March 15, 2018, when the raw materials are purchased, the spot rate has climbed to $0.79, resulting in a fair value for the option of $36,000. 10 points Sklpped a. Prepare all journal entries for the option hedge of a forecasted transaction and for the purchase of raw materials, assuming that December 31 is Leickner's year-end and that the raw materials are included in the cost of goods sold in 2018 b. What is the overall impact on net income over the two accounting periods? c. What is the net cash outflow to acquire the raw materials? eBook Print Complete this question by entering your answers in the tabs below Req Req B and C References Prepare all journal entries for the option hedge of a forecasted transaction and for the purchase of raw materials, assuming that December 31 is Leickner's year-end and that the raw materials are included in the cost of goods sold in 2018. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet Record purchase of foreign currency option as an asset. Note: Enter debits before credits. Date Debit Credit 12/15/2017 Record entry Clear entry View general journal