On June 1, Maxwell Corporation (a U.S.-based company) sold goods to a foreign customer at a price of 1,070,000 pesos and will receive payment in three months on September 1. On June 1, Maxwell acquired an option to sell 1,070,000 pesos in three months at a strike price of $0.070. Relevant exchange rates and option premia for the peso are as follows: Date June 1 June 30 September 1 Spot Rate $ 0.070 0.069 0.068 Put Option Premium for September 1 (strike price $0.070) $ 0.0033 0.0026 N/A Maxwell must close its books and prepare its second-quarter financial statements on June 30. 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. 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] Answer is not complete. Complete this question by entering your answers in the tabs below. Reg B1 Req B2 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. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) General Journal Debit Credit Accounts receivable (P) 74.900 Sales 74.900 No Date 06/01 2 06/01 3,531 Foreign currency option Cash 3,531 3 06/30 1,070 Foreign exchange gain or loss Accounts receivable (P) >> 1,070 4 06/30 749 Foreign exchange gain or loss Foreign currency option 749 5 09/01 1,070 Foreign exchange gain or loss Accounts receivable (P) 1,070 6 09/01 Foreign exchange gain or loss Foreign currency option 7 09/01 Foreign currency (P) Accounts receivable (P) 8 09/01 Cash Foreign currency (P) Foreign currency option On June 1, Maxwell Corporation (a U.S.-based company) sold goods to a foreign customer at a price of 1,070,000 pesos and will receive payment in three months on September 1. On June 1, Maxwell acquired an option to sell 1,070,000 pesos in three months at a strike price of $0.070. Relevant exchange rates and option premia for the peso are as follows: Date June 1 June 30 September 1 Spot Rate $ 0.070 0.069 0.068 Put Option Premium for September 1 (strike price $0.070) $ 0.0033 0.0026 N/A Maxwell must close its books and prepare its second-quarter financial statements on June 30. 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. 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.) Answer is not complete. Complete this question by entering your answers in the tabs below. Req B1 Req B2 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) (Negative amounts representing a loss should be entered with a minus sign.) Impact on net income