On 15 March 2018, Aussie Cosmetics Ltd placed an order for inventory with Hua Wang Ltd, a supplier in China. The goods are delivered on 1 April 2018 with the payment due on 31 July 2018. The inventory's price is 500,000. Aussie Cosmetics Ltd is concerned that the exchange rate will fall resulting in a larger payment on the payment day (31 July 2018). To hedge against the risk, the company entered into a forward rate agreement with CBA Bank on 16 March 2018. The terms of the agreement are that Aussie Cosmetics Ltd will receive 500,000 on 31 July 2018 at the forward rate of A$1 = 4.85. Aussie Cosmetics Ltd elected to classify this transaction as a cash flow hedge and to adjust the cost of the inventory as a result of the hedging transaction. The exchange rates on the relevant days are show in the table below: Date 15 March 2018 16 March 2018 1 April 2018 30 June 2018 31 July 2018 Spot Rate A$1 = 4.80 A$1 = 4.83 A$1 = 5.00 A$1 = 4.60 A$1 = 4.50 Forward Rate Agreement Rate AS1 = 4.83 ASI = 4.85 A$1 = 5.05 A$1 = 4.65 ASI= 4.50 On 1 August 2018, the purchased inventory was sold for $500,000. Required Assuming that the hedge is effective, prepare the necessary journal entries for Aussie Cosmetics Ltd to recognise the transaction above. Aussie Cosmetics Ltd's financial year ends on 30 June. Ignore GST.