Icebreaker Company (a U.S.-based company) purchases materials from a foreign supplier on December 1, 2020, with payment of 24,000 dinars to be made on March 1, 2021. The materials are consumed immediately and recognized as cost of goods sold at the date of purchase. On December 1, 2020, Icebreaker enters into a forward contract to purchase 24,000 dinars on March 1, 2021. Relevant exchange rates for the dinar on various dates are as follows:

Date	Spot Rate			Forward Rate to October 15			Call Option Premium for October 15 (strike price $1.30)
August 15	$	1.30		$	1.36		$	0.05
September 30		1.35			1.39			0.06
October 15		1.38			1.38	(spot)		N/A

a-1. Assume that the beer arrived on August 15, and the company made payment on October 15. There was no attempt to hedge the exposure to foreign exchange risk. Prepare journal entries to account for this import purchase.

a-2.

What is the impact on 2020 net income?

		1	2	3		Total
Cost of goods sold		$ 100,800				$ 100,800
Foreign exchange gain or loss		$ (2,400)	$ 2,400	$ (600)		$ (600)
Accounts payable (dinars)		$ 100,800				$ 100,800
Other comprehensive income		$ 3,000	$ (2,400)	$ 600		$ 1,200
Forward contract		$ 3,000				$ 3,000

a-3.

What is the impact on 2021 net income?

		1	2	3		Total
Foreign exchange gain or loss		$ (3,600)	$ 3,600	$ (1,200)		$ (1,200)
Accounts payable (dinars)		$ 2,400				$ 2,400
Other comprehensive income		$ 1,200	$ (3,600)	$ 1,200		$ (1,200)
Forward contract		$ 1,200	$ (4,200)			$ (3,000)
Cash		$ (102,600)				$ (102,600)
Foreign currency (dinars)		$ 106,800	$ (106,800)			$ -

a-4.

What is the impact on net income over the two accounting periods?

b-1. Assuming that Icebreaker designates the forward contract as a fair value hedge of a foreign currency payable, prepare journal entries for the import purchase and foreign currency forward contract in U.S. dollars.

b-2.

What is the impact on net income in 2020 and in 2021?

b-3.

What is the impact on net income over the two accounting periods?

**Please help with a-2, a-3, a-4, b-2, and b-3**

No Date Debit Credit 1 12/01/2020 General Journal Cost of goods sold Accounts payable (dinars) 100.800 100.800 2 12/01/2020 > No journal entry required 3 12/31/2020 2,400 Foreign exchange gain or loss Accounts payable (dinars) 2,400 4 12/31/2020 > 3,000 Forward contract Other comprehensive income O 3.000 5 12/31/2020 2.400 Other comprehensive income Foreign exchange gain or loss 2,400 6 12/31/2020 600 Foreign exchange gain or loss Other comprehensive income OOO 600 7 03/01/2021 Foreign exchange gain or loss ON 3,600 Accounts payable (dinars) 3,600 8 03/01/2021 1,200 Forward contract Other comprehensive income 1,200 9 03/01/2021 3,600 Other comprehensive income Foreign exchange gain or loss OO 3.600 10 03/01/2021 1,200 Foreign exchange gain or loss Other comprehensive income >> 1,200 11 03/01/2021 108.800 Foreign currency (dinars) Cash Forward contract >>> 102,600 4.200 . 12 03/01/2021 108,800 Accounts payable (dinars) Foreign currency (dinars) SO 106.800 Impact on 2020 net income $ (100.800) X a- 2. a- 3. a- Impact on 2021 net income Impact on net income over 2020 and 2021 No Date General Journal Debit Credit 1 12/01/2020 100.800 Cost of goods sold Accounts payable (dinars) 100.800 2 12/01/2020 No journal entry required 3 12/31/2020 2,400 Foreign exchange gain or loss Accounts payable (dinars) >> 2.400 4 12/31/2020 3.000 Forward contract Foreign exchange gain or loss BO 3,000 5 > 12/31/2020 No journal entry required 6 12/31/2020 1.200 Foreign exchange gain or loss Other comprehensive income 1,200 7 03/01/2021 3,600 Foreign exchange gain or loss Accounts payable (dinars) DO 3.600 8 03/01/2021 ON 1,200 Forward contract Foreign exchange gain or loss 1,200 9 03/01/2021 > No journal entry required 10 03/01/2021 ON 1,200 Accumulated other comprehensive income Foreign exchange gain or loss 1.200 11 03/01/2021 108,800 Foreign currency (dinars) Cash Dolo 102,600 Forward contract 4,200 | 12 03/01/2021 106,800 Accounts payable (dinars) Foreign currency (dinars) DO 106,800 b- 2. Impact on 2020 net income Impact on 2021 net income b- 3. Impact on net income over 2020 and 2021 No Date Debit Credit 1 12/01/2020 General Journal Cost of goods sold Accounts payable (dinars) 100.800 100.800 2 12/01/2020 > No journal entry required 3 12/31/2020 2,400 Foreign exchange gain or loss Accounts payable (dinars) 2,400 4 12/31/2020 > 3,000 Forward contract Other comprehensive income O 3.000 5 12/31/2020 2.400 Other comprehensive income Foreign exchange gain or loss 2,400 6 12/31/2020 600 Foreign exchange gain or loss Other comprehensive income OOO 600 7 03/01/2021 Foreign exchange gain or loss ON 3,600 Accounts payable (dinars) 3,600 8 03/01/2021 1,200 Forward contract Other comprehensive income 1,200 9 03/01/2021 3,600 Other comprehensive income Foreign exchange gain or loss OO 3.600 10 03/01/2021 1,200 Foreign exchange gain or loss Other comprehensive income >> 1,200 11 03/01/2021 108.800 Foreign currency (dinars) Cash Forward contract >>> 102,600 4.200 . 12 03/01/2021 108,800 Accounts payable (dinars) Foreign currency (dinars) SO 106.800 Impact on 2020 net income $ (100.800) X a- 2. a- 3. a- Impact on 2021 net income Impact on net income over 2020 and 2021 No Date General Journal Debit Credit 1 12/01/2020 100.800 Cost of goods sold Accounts payable (dinars) 100.800 2 12/01/2020 No journal entry required 3 12/31/2020 2,400 Foreign exchange gain or loss Accounts payable (dinars) >> 2.400 4 12/31/2020 3.000 Forward contract Foreign exchange gain or loss BO 3,000 5 > 12/31/2020 No journal entry required 6 12/31/2020 1.200 Foreign exchange gain or loss Other comprehensive income 1,200 7 03/01/2021 3,600 Foreign exchange gain or loss Accounts payable (dinars) DO 3.600 8 03/01/2021 ON 1,200 Forward contract Foreign exchange gain or loss 1,200 9 03/01/2021 > No journal entry required 10 03/01/2021 ON 1,200 Accumulated other comprehensive income Foreign exchange gain or loss 1.200 11 03/01/2021 108,800 Foreign currency (dinars) Cash Dolo 102,600 Forward contract 4,200 | 12 03/01/2021 106,800 Accounts payable (dinars) Foreign currency (dinars) DO 106,800 b- 2. Impact on 2020 net income Impact on 2021 net income b- 3. Impact on net income over 2020 and 2021