On October 1, Year 1, Valleyview Corp (based in NY) entered into a forward contract to sell 100,000 dinars in four months (on January 31, Year 2) and receive $39,000 in U.S. dollars. Exchange rates for the dinar follow:

Calendar Date	Spot Rate	Forward Rate (to January 31, Year 2)
October 1, Year 1	$0.35/dinar	$0.39/dinar
December 31, Year 1	$0.38/dinar	$0.41/dinar
January 31, Year 2	$0.40/dinar	N/A

Valleyviews incremental borrowing rate is 12 percent. The present value factor for one month at an annual interest rate of 12 percent (1 percent per month) is 0.9901. Valleyview must close its books and prepare financial statements on December 31.

Required:

Prepare journal entries, assuming that Valleyview Corp entered into the forward contract as a cash flow hedge of a 100,000 dinar receivable arising from a sale made on October 1, Year 1 of parts to a foreign customer.