A U.S. based company, Fritz Co., sells tractors to a foreign customer on December 1, 2020. Payment of 16,000 sheckels is to be received on March 1, 2021. Fritz Co, enters into a forward contract on December 1, 2020 to sell 16,000 scheckels on March 1,2021. The forward points (fee) are amortized using a straight-line monthly basis. Relevant exchange rates for the dinar on various dates are as follows:

DateSpot RateForward Rate

(to March 1, 2021)

12/1/2020$2.70$2.775

12/31/2020$2.80$2.900

3/1/2021$2.95N/A

Assuming that FritzCo. Designates the forward contract as a cash flow hedge of a foreign currency receivable:

(1) prepare journal entries for the sale and foreign currency forward contract in U.S. dollars.

(2) What is the impact on 2020 net income?

(3) What is the net income over the two accounting periods?