On October $1,2023,$ Mertag Company $($a U$.$S$.-$based company$)$ receives an order from a customer in Poland to deliver goods on January $31,2024,$ for a price of $1,034,000$ Polish zlotys $($PLN$).$ Mertag enters into a forward contract on October $1,2023,$ to sell PLN $1,034,000$ in four months $($on January $31,2024).$ U$.$S$.$ dollar$$Polish zloty exchange rates are as follows:

Date Spot Rate Forward Rate $($to January $31,2024)$

October $1,2023$ $ $0\mathrm{.}27$ $ $0\mathrm{.}31$

December $31,20230\mathrm{.}300\mathrm{.}34$

January $31,20240\mathrm{.}32$ N$/$A

Mertag designates the forward contract as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is measured by referring to changes in the forward rate and, therefore, forward points are included in assessing hedge effectiveness. Mertag must close its books and prepare financial statements on December $31.$ Discounting to present value can be ignored.

Required:

A$.$ Prepare journal entries for the foreign currency forward contract, foreign currency firm commitment, and export sale.

$1.$ Record the sales agreement.

$2.$ Record entry for forward contract entered into by Mertag.

$3.$ Record the forward contract and recognize the change in fair value.

$4.$ Record the firm commitment and recognize the change in fair value.

$5.$ Record the entry to adjust the fair value of the forward contract.

$6.$ Record the entry to adjust the fair value of the firm commitment.

$7.$ Record the sale and receipt of PLN$.$

$8.$ Record settlement of forward contract.

$9.$ Record entry to close the firm commitment

B$.$ Determine the net benefit, if any, realized by Mertag from entering into the forward contract.