Brandlin Company of Anaheim, California, purchases materials from a foreign supplier on December 1, 2017, with payment of 23,000 korunas to be made on March 1, 2018. The materials are consumed immediately and recognized as cost of goods sold at the date of purchase. On December 1, 2017, Brandlin enters into a forward contract to purchase 23,000 korunas on March 1, 2018. Relevant exchange rates for the koruna on various dates are as follows: Forward Rate Date December 1, 2017 December 31, 2017 March 1, 2018 (to March 1, 2018) $4.175 4.300 Spot Rate $4.10 4.20 4.35 N/A Brandlin's incremental borrowing rate is 12 percent. The present value factor for two months at an annual interest rate of 12 percent (1 percent per month) is 0.9803. Brandlin must close its books and prepare financial statements at December 31