On November 1, 2017, Bernard Company (a U.S.-based company) sold merchandise to a foreign customer for 110,000 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 110,000 FCUs. The company properly designates the forward contract as a cash flow hedge of a foreign currency receivable. The following exchange rates apply:

Date	Spot Rate			Forward Rate (to April 30, 2018)
November 1, 2017	$	0.22		$	0.21
December 31, 2017		0.20			0.18
April 30, 2018		0.19			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.

1. Prepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract.
2. What is the impact on net income in 2017?
3. What is the impact on net income in 2018?