On October 15, 20x1, ABC Limited sold merchandise to two companies in Mexico. In the first transaction, the price was 5 million pesos and was to be paid in 90 days. Worried about the exposure to the exchanges, the company hedged the receivable for a 90day period with a forward contract. In the second transaction, the price was 5.6 million pesos and the date of payment was November 15, 20x4. Due to the difficulty of getting a forward contract to match the debt payment was due, the company decided to remain in an unhedged position on this receivable. The exchange rates were as follows: October 15, 20x1, spot rate $1 = 16.00 pesos October 15, 20x1, forward 90day rate $1 = 18.52 pesos December 31, 20x1, spot rate $1 = 18.20 pesos December 31, 20x1, forward rate for January 13, 20x2 $1 = 18.60 pesos January 13, 20x2, spot rate $1 = 18.90 pesos December 31, 20x2, spot rate $1 = 15.50 pesos Required: Ignoring closing entries, a. Using the gross and net methods, prepare all the related journal entries required for the first sale in each of 20x1 and 20x2 b. Assuming instead that the company had not hedged the receivable from the first sale in any way prepare the appropriate journal entries for 20x1 and 20x2 to record the situation. c. Prepare all the related journal entries in each of 20x1 and 20x2. [CPA Canada, adapted]