Pacifico Company, a U.S.-based importer of beer and wine, purchased 2,000 cases of Oktoberfest-style beer from a German supplier for 620,000 euros. Relevant U.S. dollar exchange rates for the euro are as follows: The company closes its books and prepares third-quarter financial statements on September 30. d. Assume that the company ordered the beer on August 15 . The beer arrived and the company paid for it on October 15 . On August 15 , the company purchased a two-month call option on 620,000 euros. The company designated the option 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 spot rate. The time value of the option is excluded from the assessment of hedge effectiveness, and the change in time value is recognized in net income over the life of the option. Prepare journal entries to account for the foreign currency option, foreign currency firm commitment, and import purchase. Assume that the company ordered the beer on August 15 . The beer arrived and the company paid for it on October 15 . On August 15 , the company purchased a two-month call option on 620,000 euros. The company designated the option 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 spot rate. The time value of the option is excluded from the assessment of hedge effectiveness, and the change in time value is recognized in net income over the life of the option. Prepare journal entries to account for the foreign currency option, foreign currency firm commitment, and import purchase. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) Show less Journal entry worksheet \begin{tabular}{lllllll} 3 & 4 & 5 & 6 & 7 & 8 & 9 \end{tabular} Record the gain or loss on the foreign currency euro call option with a premium of $0.050 per Euro at a strike price of $1.55 and an exercise date of October 15. Note: Enter debits before credits. Journal entry worksheet 9 Record the gain or loss on the foreign currency euro call option with a premium of $0.060. Note: Enter debits before credits. Journal entry worksheet 8 Record the transfer of exchange gain or loss to firm commitment. Note: Enter debits before credits. Journal entry worksheet Record the entry for changes in the fair value of Euro call option. Note: Enter debits before credits. Journal entry worksheet Record the transfer of exchange gain or loss to firm commitment. Note: Enter debits before credits. Journal entry worksheet Record purchase of foreign currency for settling the accounts payable. Note: Enter debits before credits. Journal entry worksheet 5 Record purchase of inventory from the German supplier. Note: Enter debits before credits. Journal entry worksheet