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 $1,040,000$ Polish zlotys $($PLN$).$ Mertag enters into a forward contract on October $1,2023,$ to sell PLN $1,040,000$ 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 $1,2023$ $ $0\mathrm{.}25$ $ $0\mathrm{.}29$

December $31,20230\mathrm{.}280\mathrm{.}32$

January $31,20240\mathrm{.}30$ 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.