On September 1, Year 1, Company A (a US based company) recieved an order to sell a machine to a customer in Canada at a price of 100,000 Canadian dollars. The settlement date for the order is March 1, year 2. On September 1, year 1, company A purchased a put option at a premium of .0085 giving it the right to sell 100,000 Canadian dollars on MArch 1, year 2 for $75,000. Company A properly designates the option as a cash flow hedge of the Canadian dollar sale. The option premium on December 31, year 1 was .0075, and at a settlement date, it was .04

Date:	Spot Rate:
September 1, year 1	$0.75
December 31, year 1	$0.73
March 1, year 2	$0.71

Company A incremental borrowing rate is 12 percent.

Required: Create a cash flow hedgeing table for the derivative. Make all journal entries, post to T-accounts, and determine the net income in years' 1 and 2.