On June 1, Alexander Corporation sold goods to a foreign customer at a price of 1,310,000 pesos and will receive payment in three months on September 1. On June 1, Alexander acquired an option to sell 1,310,000 pesos in three months at a strike price of $0.063. Relevant exchange rates and option premiums for the peso are as follows:

Date	Spot Rate			Put Option Premium for September 1 (strike price $0.063)
June 1	$	0.063		$	0.0026
June 30		0.069			0.0022
September 1		0.062			N/A

Alexander must close its books and prepare its second-quarter financial statements on June 30.

a-1. Assuming that Alexander designates the foreign currency option as a cash flow hedge of a foreign currency receivable, prepare journal entries for these transactions in U.S. dollars.

a-2. What is the impact on net income over the two accounting periods?

b-1. Assuming that Alexander designates the foreign currency option as a fair value hedge of a foreign currency receivable, prepare journal entries for these transactions in U.S. dollars.

b-2. What is the impact on net income over the two accounting periods?