On November 1, 2017, Bernard Company (a U.S.-based company) sold merchandise to a foreign customer for 220,000 FCUs with payment to be received on April 30, 2018. At the date of sale, Bernard entered into a six-month forward contract to sell 220,000 FCUs. The company properly designates the forward contract as a cash flow hedge of a foreign currency receivable. The following exchange rates apply: Date November 1, 2017 December 31, 2017 April 30, 2018 Forward Rate (to April 30, 2018) $0.32 0.29 Spot Rate $ 0.33 0.31 0.30 N/A Bernard's incremental borrowing rate is 12 percent. The present value factor for four months at an annual interest rate of 12 percent (1 percent per month) is 0.9610 a. Prepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract. b. What is the impact on net income in 2017? c. What is the impact on net income in 2018