On March $1,$ Derby Corporation $($a U$.$S$.-$based company$)$ expects to order merchandlse from a supplier in Norway in three months. On March $1,$ when the spot rate is $$0\mathrm{.}16$ per Nonweglan krone, Derby enters into a forward contract to purchase $670,000$ Nonweglan kroner at a three$-$month forward rate of $$0\mathrm{.}20.$ Forward points are excluded in assessing the forward contract's effectlveness as a hedge, and are amortized to net income on a straight$-$line basis. At the end of three months, when the spot rate is $$0\mathrm{.}198$ per Norweglan krone, Derby orders and recelves the merchandise, paying $670,000$kroner. The merchandise is sold within $30$ days.

Required:

a$-1.$ Prepare all journal entries for Derby Corporation related to this transaction and hedge.

a$-2.$ What amount should Derby Corporation report in the current year's net income as cost of goods sold?

b$.$ What amount should Derby Corporation report in the current year's net income as foreign exchange gain or loss?

Complete this question by entering your answers in the tabs below.

Req A$1$

Req A$2$

Reg B

Predare all journal entries for Derby Corporation related to this transaction and hedge.

Note: If no entry is required for a transaction$/$event$,$ select $"$No Joumal Entry Required" in the first account field.

Vere transectlon llst

$\backslash$table$[[$a$,$No$,$Date,General Journal,Debit,Credit$],[2,1,\frac{03}{01},$No Journal Entry Required,,$],[[,2,,,,],[7,2,\frac{05}{31},$Other Comprehensive Income $($OCI$),1\mathrm{.}340,],[,,$Fonward Contract,$1),1,340],[,2,2+202+2,,1],[7,3,\frac{05}{31},$Cost of Goods Sold,$6,700,],[10,\frac{?}{\text{b}\text{a}\text{r}}(2),$Other Comprehensive Income $($OCl$),,6,700],[2,2,5,,],[1,4,\frac{05}{31},$Foreign Currency $($NOK$),,],[,,$Fonward Contract,,$],[,,$Cash,,$],[,,,,],[\frac{?}{{?}_{?}},5,\frac{05}{31},$Foreign' Currency $($NOK$),,],[,,$Inventory,,$],[,,,,],[l,6,\frac{05}{31},$Cost of Goods Sold,,$],[,,$Inventory,,$],[,,,,],[/,7,\frac{05}{31},$Accumulated Other Comprehensive Income $($AOCl$),,],[,,$Cost of Goods Sold,,$]]$