On June 1, Cairns Corporation purchased goods from a foreign supplier at a price of 1,400,000 francs and will make payment in three months on September 1. On June 1, Cairns acquired an option to purchase 1,400,000 francs in three months at a strike price of $0.779. Relevant exchange rates and option premiums for the franc are as follows: Call Option Premium for September 1 (strike price $0.779) $ 0.004 Spot Rate 0.779 0.784 Date June 1 June 30 September 1 0.007 N/A 0.802 Cairns must close its books and prepare its second-quarter financial statements on June 30. a-1. Assuming that Cairns designates the foreign currency option as a cash flow hedge of a foreign currency payable, 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 Cairns designates the foreign currency option as a fair value hedge of a foreign currency payable, prepare journal entries for these transactions in U.S. dollars. b-2. What is the impact on net income over the two accounting periods