Please answer both questions they are directly related to one another, thank you.

5. Accounting for fair value hedge of inventory (no ineffectiveness in the hedge) 40 Our company reports commodities inventory on our balance sheet at $750,000. The inventory has a fair value of $810,000 and we are concerned about a forecasted decline in the commodity price. We purchase a financial derivative in order to mitigate this risk. On the last day of the period, the fair value of the inventory has declined by $20,000 and the fair value of the derivative has increased by $20,000. All of the inventory is sold at its fair value and the derivative is settled on the last day of the period. Complete the following table of the required journal entries during the period: Debit (Credit) Cash Derivative Inventory Earnings Recognize the change in the fair value of the derivative ... Recognize the change in the fair value of the inventory. Recognize revenue from the sale.. Recognize cost of goods sold relating to the sale Recognize settlement of the derivative.. Total 56. Accounting for fair value hedge of inventory ineffectiveness in the hedge)" Assume the same facts in exercise 55 except that the terms of the derivative security instrument do not perfectly match the inventory and its fair value has increased by $18,000 as compared with the decline in fair value of the inventory of $20,000. Complete the following table of the required journal entries during the period: Debit (Credit) Derivative Inventory Cash Earnings Pecognize the change in the fair value of the derivative. Recognize the change in the fair value of the inventory... Pecognize cost of goods sold relating to the sale Recognize revenue from the sale... Pogrize settlement of the derivative.. WA