On December 1, 2021, a U.S. firm purchased inventory for 500,000 euros payable on March 1, 2022 (i.e., the transaction is denominated in euros). The firm also entered into a futures contract to hedge their FX exposure related to the upcoming payment. The firm's fiscal year-end is December 31. The EUR/USD spot rates and the EUR/USD forward rates to purchase euros on March 1, 2022, are as follows: Prepare the entries related to the purchase of inventory and the futures contracts at the following dates: - December 1, 2021 - Transaction Date - December 31, 2021 - Balance Sheet Date - March 1, 2022- Settlement Date Explain the net effect of the futures contract on net income over the life of the contract