Part $1$

On October $1,2024,$ Blue Truck Company purchased inventory from a British supplier at a price of $100,000$ British pounds. On October $1,2024,$ Blue Truck pays $$1,800$ for a three$-$month call option on $100,000$ pounds with a strike price of $$2\mathrm{.}04$ per pound. The option is considered to be a cash flow hedge of a foreign currency transaction. On December $31,2024,$ the option has a fair value of $$1,600.$ The following spot exchange rates apply:

Date Spot Rate

October $1,2024$ $ $2\mathrm{.}04$

December $31,2024$ $ $1\mathrm{.}99$

February $1,2025$ $ $2\mathrm{.}02$

Use the journal entries given and find the values assuming Blue Truck uses a calendar year end.

Accounts Recievable

Sales

Foreign Exchange Gain$/$Loss

Accounts Recievable

OCI

Foreign Exchange Gain$/$Loss

Forward Contract

OCI

Foreign Exchange Gain$/$Loss

Accounts Recievable

OCI

Foreign Exchange Gain$/$Loss

Forward Contract

OCI

Foreign Currency

Accounts Receivable

Cash

Foreign Currency

Forward Contract