Based on past experience, Leickner Company expects to purchase raw materials from a foreign supplier at a cost of 2,000,000 marks on March 15, 2018. To hedge this forecasted transaction, the company acquires a three-month call option to purchase 2,000,000 marks on December 15, 2017. Leickner selects a strike price of $0.79 per mark, paying a premium of $0.003 per unit, when the spot rate is $0.79. The spot rate increases to $0.794 at December 31, 2017, causing the fair value of the option to increase to $13,000. By March 15, 2018, when the raw materials are purchased, the spot rate has climbed to $0.81, resulting in a fair value for the option of $40,000. 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? Answer is not complete. Complete this question by entering your answers in the tabs below. Req A Req B and C 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.) No Date General Journal Credit Debit 6,000 12/15/2017 Foreign currency option Cash 6,000 12/15/2017 No journal entry required 12/31/2017 7,000 Foreign currency option Accumulated other comprehensive income 7,000 12/31/2017 Option expense Accumulated other comprehensive income 03/15/2018 Foreign currency option Accumulated other comprehensive income 03/15/2018 Option expense Accumulated other comprehensive income 03/15/2018 Foreign currency (marks) Cash 03/15/2018 Parts inventory 9 03/15/2018 Accumulated other comprehensive income Adjustment to net income Req A Req B and C b. What is the overall impact on net income over the two accounting periods? (In case of negative impact on net income, answer should be entered with a minus sign.) c. What is the net cash outflow to acquire the raw materials? b. Impact on net income in 2017 Impact on net income in 2018 Net cash outflow