On June 1, Maxwell Corporation (a U.S.-based company) sold goods to a foreign customer at a price of 1,340,000 pesos and will receive payment in three months on September 1. On June 1, Maxwell acquired an option to sell 1,340,000 pesos in three months at a strike price of $0.098. Relevant exchange rates and option premia for the peso are as follows:

Date	Spot Rate			Put Option Premium for September 1 (strike price $0.098)
June 1	$	0.098		$	0.0061
June 30		0.097			0.0040
September 1		0.096			N/A

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

1. b-1. Assuming that Maxwell designates the foreign currency option as a fair value hedge of a foreign currency receivable, prepare journal entries for the export sale and related hedge in U.S. dollars.

2. b-2. What is the impact on net income over the two accounting periods due to fluctuations in the value of the foreign currency? [Looking for net effect on the Foreign Exchange Gain/Loss account.]