On November 3, 2020, Robin Franchises, a U.S. company, sold merchandise to a franchisee in the U.K., at a price of £8,000,000, payable in three months in pounds. To hedge its exposed asset position, on November 3, 2020, Robin entered a forward contract for delivery of £8,000,000 to the broker on February 3, 2021. On February 3, 2021, Robin received payment from the franchisee, and delivered the pounds to the broker to close the forward contract. Robin’s accounting year ends December 31. Exchange rates ($/£) are as follows:

	Spot rate	Forward rate for delivery February 3, 2021
November 3, 2020	$ 1.3168	$1.3166
December 31, 2020	1.3164	1.3163
February 3, 2021	1.3162	--

a. Prepare the journal entries Robin Franchises made on November 3, 2020 and February 3, 2021, as well as the required end of year adjusting entry. (7 total entries)

b. Calculate the cash gain or loss realized by Robin Franchises by hedging compared with not hedging.