$($b$)$ NZ Bike Ltd$,$ a New Zealand importer, has bought US$ $750,000$ of goods overseas. The

payment is due in exactly two months time. At the time of purchase, the spot rate of

exchange is $NZ$$$1=$ US$$0\mathrm{.}62.$

NZ Bike Ltd wishes to hedge. On the day of the purchase, the company buys a call option

that is$,$ it buys the right to buy US $$750,000$ at an exercise exchange rate of $NZ$$$1=$

US $$0\mathrm{.}61$ two months later. The option costs $$7,500$ in cash. The relevant information is

shown in the table below:

Required: In accordance with NZ IFRS $9,$ show all workings clearly:

Provide monthly journal entries to record the purchase, option contract and any

additional journal entries that are required through to $($and including$)$ settlement.

NOTE: Clearly indicate if the gain$/$loss goes to P&L account or OCl account, and provide

brief narrations for the journal entries.

Calculate the overall gain or loss from both the accounts payable and option contract.

Provide an overall position check for total cash payment.