On October 1, 2020, Mertag 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 1,030,000 Polish zloty (PLN). Mertag enters into a forward contract on October 1, 2020, to sell PLN 1.030,000 in four months (on January 31, 2021). U.S. dollar-Polish zloty exchange rates are as follows: Date October 1, 2020 December 31, 2020 January 31, 2021 Spot Rate $ 0.26 0.29 0.31 Forward Rate (to January 31, 2021) $ 0.30 0.33 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. a. Prepare journal entries for the foreign currency forward contract, foreign currency firm commitment, and export sale. b. Determine the net benefit, if any, realized by Mertag from entering into the forward contract. Journal entry worksheet > Record entry for forward contract entered into by Mertag Company. Note: Enter debits before credits. Date General Journal Debit Credit 10/01/2020 Record entry Clear entry View general journal Journal entry worksheet Record the forward contract and recognize the change in fair value. Note: Enter debits before credits. Date General Journal Debit Credit 12/31/2020 Record entry Clear entry View general journal Journal entry worksheet Record the firm commitment and recognize the change in fair value. Note: Enter debits before credits. Date General Journal Debit Credit 12/31/2020 Record entry Clear entry View general journal Journal entry worksheet Record the entry to adjust the fair value of the forward contract. Note: Enter debits before credits. Date General Journal Debit Credit 01/31/2021 Record entry Clear entry View general journal Journal entry worksheet Record the sale and receipt of PLN. Note: Enter debits before credits. Date General Journal Debit Credit 01/31/2021 Record entry Clear entry View general journal Journal entry worksheet