On November $1,2023,$ Cheng Company $($a U$.$S$.-$based company$)$ forecasts the purchase of goods from a foreign supplier for $180,000$ yuan. Cheng expects to receive the goods on April $30,2024,$ and make immediate payment. On November $1,2023,$ Cheng enters into a six$-$month forward contract to buy $180,000$ yuan. The company properly designates the forward contract as a cash flow hedge of a forecasted foreign currency transaction. Forward points are excluded in assessing hedge effectiveness and are amortized to net income using a straight$-$line method on a monthly basis over the life of the contract. The following U$.$S$.$ dollar$$Yuan exchange rates apply:

Date Spot Rate Forward Rate $($to April $30,2024)$

November $1,2023$ $ $0\mathrm{.}29$ $ $0\mathrm{.}275$

December $31,20230\mathrm{.}280\mathrm{.}250$

April $30,20240\mathrm{.}26$ N$/$A

As expected, Cheng receives goods from the foreign supplier on April $30,2024,$ and pays $180,000$ yuan immediately. Cheng sells the imported goods in the local market in May $2024.$

Required:

Prepare all journal entries, including December $31$ adjusting entries, to record the foreign currency forward contract and import purchase.

What is the impact on net income in $2023?$

What is the impact on net income in $2024?$