Pacifico Company, a U.S.-based importer of beer and wine, purchased 1,500 cases of Oktoberfest-style beer from a German supplier for 390,000 euros. Relevant U.S. dollar exchange rates for the euro are as follows:

Date	Spot Rate			Forward Rate to October 15			Call Option Premium for October 15 (strike price $1.30)
August 15	$	1.30		$	1.36		$	0.05
September 30		1.35			1.39			0.06
October 15		1.38			1.38	(spot)		N/A

The company closes its books and prepares third-quarter financial statements on September 30.

1. Assume that the beer arrived on August 15, and the company made payment on October 15. On August 15, the company entered into a two-month forward contract to purchase 390,000 euros. The company designated the forward contract as a cash flow hedge of a foreign currency payable. Forward points are excluded in assessing hedge effectiveness and amortized to net income using a straight-line method on a monthly basis. Prepare journal entries to account for the import purchase and foreign currency forward contract. (there are 11 entries)