Shandra Corporation (a U.S. based company) expects to order goods from a foreign supplier at a price of 10%,000 poundS, with delivery and payment to be made on June 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 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 $1.27 per pound and costs $1,070. The goods are recelved and paid for on June 15 . Shandra sells the imported goods in the local market immediately. The spot rate for pounds is $1.320 on tune 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 ? Answer is not complete. Complete this question by entering your answers in the tabs below. Prepare all journal entries for Shandra Corporation related to this transaction and hedge. Note: If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field