On November 1, 2014, Panda Co. expects to sell merchandise for $1,000 to a customer in US on a January 31, 2015. The transaction is probable but there is no binding agreement for this sale and is to be denominated in US dollars. The settlement is to be made on January 31, 2015. To hedge this forecasted transaction against currency fluctuations, Panda entered into a 90-day forward contract to sell $1,000 for P40.25. On January 31, 2015, the sale happened and on the same day, the $1,000 was sold by Panda Co. The hedge is designated as a cash flow hedge. The following rates are applicable. Spot Rate Forward Rate November 1, 2014 P 40.10 P 40.25 December 31, 2014 40.35 40.40 January 30, 2015 40.30 40.25Prepare the necessary journal entries to record the transactions. For the hedging instrument, prepare the entries using the gross method and the net method