On March 1, Pimlico Corporation (a U.S.-based company) expects to order merchandise from a supplier in Sweden in three months. On March 1, when the spot rate is $0.12 per Swedish krona, Pimlico enters into a forward contract to purchase 732,500 Swedish kroner at a three-month forward rate of $0.140. At the end of three months, when the spot rate is $0.138 per Swedish krona, Pimlico orders and receives the merchandise, paying 732,500 kroner. What amount does Pimlico report in net income as a result of this cash flow hedge of a forecasted transaction? Multiple Choice $1,465 premium expense plus a $11,720 negative adjustment to net income when the merchandise is purchased. $1,465 premium expense plus a $1,465 positive adjustment to net income when the merchandise is purchased. $14,650 Discount expense plus a $11,720 positive adjustment to net income when the merchandise is purchased. $14,650 premium expense plus a $13,185 positive adjustment to net income when the merchandise is purchased