Fair 524.000 Option contract designated as a cash flow hedge of a forecasted foreign currency denominated sales transaction, strengthening SUS On January 5, 2019, our company receives a nonbinding purchase order for sale of merchandise to a customer in Slovakia, with delivery of the merchandise scheduled for June 30, 2019. The customer preliminarily agreed to pay 200,000 for the merchandise, and payment is due from the customer upon delivery. On January 5, 2019, our company also purchases an option that gives our company the right to sell (i.e., put) 200,000 on any date until June 30, 2019 (ie, it is an "American style option for $1.31:1 (ie, the spot rate on January 5, 2019). On January 5, 2019, the fair value of the option i.e. the option premium) is $24,000. In addition, our company elected to immediately include in the determination of net income all of the change in option value attributable to factors excluded from the assessment of hedge effectiveness (ie, the non-intrinsic value components, like time value). The relevant exchange rates and related balances for the period from January 5, 2019, to June 30, 2019, are as follows: Option Contract Change Change in Other Change Spot Eate Sale in Fair intrinsic intrinsic Sources in Other (SUS-1) Transaction value Value Value Value Value of Value Value Jan 5, 2019 131 5:24,000 M31, 2019 1.26 54,400 53.400 340,000 340,000 14400 1.600 Jun 30, 2019 12239/6,000 72,000 1,600 72,000 32.000 ( (14,4001 "Derived from an option pricing model such as the Black-Scholes model 200,000 $1.31:1) - (200,000 $1.26.51) (E800,000 $1.31:e1)-(200,000 $1.221) Fair value - intrinsic value i.e.equals the residual fair value derived from all sources except for intrinsic value) a. Prepare the journal entries to record all the adjustments required for the forecasted sale and option contract on January 5, 2019, March 31, 2019, and June 30, 2019. Note: If no entry is required, select "No entry" as your answers under Description and leave the debit and credit answers blank (zero). Hedged Transaction Description Credit Nountry No entry Data 0 331/19 Nountry Nountry 6/3019 Cash 9/6,000 9/6,000 CF Hedge Note: Entries assure all of excluded option value change runs through income Date Description Debit Credit 19 Option contact 24,000 Cash 24,000 331/19 Option contact 30,400 OCI Cashflow by an 30,400 To change in val. San 14,400 x Oci Cashflow dan 14,400 K 17,500 63019 Option contractat OCI.Cash flow he To che in far valum 17,600 32,000 X 32,000 M OCI Cash flow he To recognise change in other sources 72,000 32,000 Option contact To record in AOCI-Cash flow badan 72.000 To record racicabil What amount of sales was recognized in the quarter ending March 31, 2019? so What amount of sales was recognized in the quarter ending June 30, 2019? $0 What is the total amount of sales recognized across the quarters ending March 31 and June 30, 20192 Fair 524.000 Option contract designated as a cash flow hedge of a forecasted foreign currency denominated sales transaction, strengthening SUS On January 5, 2019, our company receives a nonbinding purchase order for sale of merchandise to a customer in Slovakia, with delivery of the merchandise scheduled for June 30, 2019. The customer preliminarily agreed to pay 200,000 for the merchandise, and payment is due from the customer upon delivery. On January 5, 2019, our company also purchases an option that gives our company the right to sell (i.e., put) 200,000 on any date until June 30, 2019 (ie, it is an "American style option for $1.31:1 (ie, the spot rate on January 5, 2019). On January 5, 2019, the fair value of the option i.e. the option premium) is $24,000. In addition, our company elected to immediately include in the determination of net income all of the change in option value attributable to factors excluded from the assessment of hedge effectiveness (ie, the non-intrinsic value components, like time value). The relevant exchange rates and related balances for the period from January 5, 2019, to June 30, 2019, are as follows: Option Contract Change Change in Other Change Spot Eate Sale in Fair intrinsic intrinsic Sources in Other (SUS-1) Transaction value Value Value Value Value of Value Value Jan 5, 2019 131 5:24,000 M31, 2019 1.26 54,400 53.400 340,000 340,000 14400 1.600 Jun 30, 2019 12239/6,000 72,000 1,600 72,000 32.000 ( (14,4001 "Derived from an option pricing model such as the Black-Scholes model 200,000 $1.31:1) - (200,000 $1.26.51) (E800,000 $1.31:e1)-(200,000 $1.221) Fair value - intrinsic value i.e.equals the residual fair value derived from all sources except for intrinsic value) a. Prepare the journal entries to record all the adjustments required for the forecasted sale and option contract on January 5, 2019, March 31, 2019, and June 30, 2019. Note: If no entry is required, select "No entry" as your answers under Description and leave the debit and credit answers blank (zero). Hedged Transaction Description Credit Nountry No entry Data 0 331/19 Nountry Nountry 6/3019 Cash 9/6,000 9/6,000 CF Hedge Note: Entries assure all of excluded option value change runs through income Date Description Debit Credit 19 Option contact 24,000 Cash 24,000 331/19 Option contact 30,400 OCI Cashflow by an 30,400 To change in val. San 14,400 x Oci Cashflow dan 14,400 K 17,500 63019 Option contractat OCI.Cash flow he To che in far valum 17,600 32,000 X 32,000 M OCI Cash flow he To recognise change in other sources 72,000 32,000 Option contact To record in AOCI-Cash flow badan 72.000 To record racicabil What amount of sales was recognized in the quarter ending March 31, 2019? so What amount of sales was recognized in the quarter ending June 30, 2019? $0 What is the total amount of sales recognized across the quarters ending March 31 and June 30, 20192