Hedge AccountingRazan Company, a distinguished exporter of specialty olive oil based in Spain, recently finalizeda sale. This transaction involved the transfer of $50,000$ cases of premium olive oil to Abdul SattarCo, an esteemed importer situated in the United Kingdom. The negotiated price for each case wasset at $5,$ resulting in a total sales revenue of $250,000$ for Razan Company. To providecomprehensive context, the prevailing exchange rates relevant to this transaction are provided asfollows:Spot rate$1=$Forward rate Put option premium$($strike price $1\mathrm{.}17)$March $1,20$X$11\mathrm{.}211\mathrm{.}160\mathrm{.}04$July $31,20$X$1($Yearend for Razan Co$.)1\mathrm{.}191\mathrm{.}140\mathrm{.}05$September $30,20$X$21\mathrm{.}111\mathrm{.}110\mathrm{.}06$The below table provides the changes in fair values of the option:OptionDate Spot rate$1=$Put option premium$($strike price $1\mathrm{.}17)$FairvalueChange in fairvalueMarch $1,20$X$11\mathrm{.}210\mathrm{.}0410,000$ July $31,20$X$1($Year endfor Razan Co$.)1\mathrm{.}190\mathrm{.}0812,500+2,500$September $30,20$X$21\mathrm{.}110\mathrm{.}10-0--12,500$The below table provides the changes in fair values of the forward contract:Forward contactDate Spot rate$1=$ForwardrateFairvalueChange in fairvalueMarch $1,20$X$11\mathrm{.}211\mathrm{.}160$ July $31,20$X$1($Year end for RazanCo.$)1\mathrm{.}191\mathrm{.}144,655+4,655$September $30,20$X$21\mathrm{.}111\mathrm{.}1112,500+7,8451.$ Assume the olive oil was delivered on March $1,20$X$1,$ and cash was received on September $30,20$X$2.$ There was no attempt to hedge the exposure to foreign exchange risk. Prepare journal entriesto account for this export sales in the books of Razan Company$\mathrm{.}2.$ Assume the olive oil was delivered on March $1,20$X$1,$ and cash was received on September $30,20$X$2.$ On March $1,$ Razan Company entered into a seven$-$month forward contract to sell $250,000.$The forward contract is properly designated as a fair value hedge of a foreign currency. Preparejournal entries to account for the export sales and foreign currency forward contract in the booksof Razan Company$\mathrm{.}3.$ Assume the olive oil was delivered on March $1,20$X$1,$ and cash was received on September $30,20$X$2.$ On March $1,$ Razan Company entered into a seven$-$month forward contract to sell $250,000.$The forward contract is properly designated as a cash flow hedge of a foreign currency. Preparejournal entries to account for the export sales and foreign currency forward contract in the booksof Razan Company$\mathrm{.}4.$ Assume the olive oil was delivered on March $1,20$X$1,$ and cash was received on September $30,20$X$2.$ On March $1,$ Razan Company purchased a seven$-$month put option for $250,000.$ The optionwas properly designated as a cash flow hedge of a foreign currency receivable. Prepare journalentries to account for the export sales and foreign currency option in the books of Razan Company.