Exercise A-8 (Algo) Derivatives; foreign currency; cash flow hedge [LOA-4] Cleveland Company is a U.S. firm with a U.S. dollar functional currency that manufactures copper-related products. It forecasts that it will sell 3,000 feet of copper tubing to one of its largest customers at a price of 30,000,000. Although this sale has not been firmly committed, Cleveland expects that the sale will occur in six months on June 30, 2022. Thus, Cleveland is exposed to changes in foreign currency exchange rates. To reduce this exposure, Cleveland enters into a six-month foreign currency exchange forward contract with a third-party dealer on January 1, 2022, to deliver \ and receive US$. The foreign exchange contract has the following terms: Contract amount: Maturity date: 30,000,000 June 30, 2022 US $1.00 Forward contract rate: 101.00 Yen/US$ Exchange rates: Date January 1 March 31 June 30 Spot rate 94.00/US $1.00 98.00/US $1.00 Forward rate for June 30 101.00/US $1.00 104.00/US $1.00 106.00/US $1.00 Cleveland obtains the fair values of the forward exchange contract from the third-party dealer. Swap fair value Required: January 1 $0 March 31 June 30 $ 8,900 $14,011 1. Calculate the net settlement on June 30, 2022. 2. Prepare the journal entries for the period January 1 to June 30, 2022, to record the forward contract, necessary adjustments for changes in fair value, and settlement. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the net settlement on June 30, 2022. (Round your intermediate and final answer to the nearest whole dollar.) June 30 Net cash settlement Required 1 Required 2 Prepare the journal entries for the period January 1 to June 30, 2022, to record the forward contract, necessary adjustments for changes in fair value, and settlement. (If no entry is required for a transaction/event, select "No journal entry required" i the first account field. Round your intermediate and final answers to the nearest whole dollar.) No 1 Date General Journal 01/01 No journal entry required 2 03/31 Forward contract Other comprehensive income (OCI) Debit Credit 8,900 8,900 3 06/30 Forward contract 5,111 Other comprehensive income (OCI) 5,111 4 06/30 Cash Forward contract 5 06/30 Cash Sales 14,011 14,011 283,018 283,018 X 6 06/30 Other comprehensive income (OCI) Sales 14,011 14,011