Shandra Corporation (a US. based company) expects to order goods from a foreign supplier at a price of 107,000 pounds, valth delivery and payment to be made on ture 15 , On April 15, when the spot rate is $1.27 per pound, Shandra purchases a two-month call option on 107,000 pounds and designates this option as a cash llow 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 riet income over the ife of the option. The option has a strike price of \$1.27 per pound and costs $1.070. The goods are recelved and pald for on June 15 . Shandra sells the imported goods in the local market immediately. The spot rate for pounds is $1,320 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 forelgn exchange gain or loss for the quarter ehding June 30 ? Complete this question by entering your answers in the tabs below