Shandra Corporation $($a U$.$S$.-$based company$)$ expects to order goods from a foreign supplier at a price of $119,000$ pounds, with delivery and payment to be made on June $15.$ On April $15,$ when the spot rate is $$1\mathrm{.}46$ per pound, Shandra purchases a two$-$month call option on $119,000$ pounds and designates this option as a cash flow hedge of a forecasted foreign currency transaction. The time value of the option is excluded in assessing hedge effectiveness; the change in time value is recognized in net income over the life of the option. The option has a strike price of $$1\mathrm{.}46$ per pound and costs $$1,190.$ The goods are received and paid for on June $15.$ Shandra sells the imported goods in the local market immediately. The spot rate for pounds is $$1\mathrm{.}510$ on June $15.$

Required:

a$-1.$ Prepare all journal entries for Shandra Corporation related to this transaction and hedge.

a$-2.$ What amount should Shandra Corporation report in net income as cost of goods sold for the quarter ending June $30?$

b$.$ What amount should Shandra Corporation report in net income as foreign exchange gain or loss for the quarter ending June $30?$