On October 1, 2020, Faggy Company (a U.S.-based company) receives an order from a customer in Poland to deliver goods on January 31, 2021, for a price of 1,036,000 Polish zlotys (PLN). Faggy enters into a forward contract on October 1, 2020, to sell PLN 1,036,000 in four months (on January 31, 2021). U.S. dollarPolish zloty exchange rates are as follows:

Date	Spot Rate			Forward Rate (to January 31, 2021)
October 1, 2020	$	0.29		$	0.32
December 31, 2020		0.30			0.35
January 31, 2021		0.31			N/A

Faggy 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. Faggy must close its books and prepare financial statements on December 31. Discounting to present value can be ignored.

• Record the firm commitment and recognize the change in fair value.
• Record the entry to adjust the fair value of the forward contract.
• Record the entry to adjust the fair value of the firm commitment.
• Record the sale and receipt of PLN.
• Record settlement of forward contract.
• Record entry to close the firm commitment.