Signal Corp is a US manufacturer of auto parts with branch operations in France. On January 1, 2022, Signal wishes to use a foreign currency option to hedge a 20,000,000 euro denominated accounts payable that is due in four years. Signal plans to use fair value hedge accounting. Over the subsequent 4 quarters the following are the changes in the fair value of the payable and the fair value of the foreign currency option hedge. Quarter ended March 31, 2022: Euro payable increases by $400,000 Option hedge declines by $350,000 Quarter ended June 30, 2022: Quarter ended Sept. 30, 2022: Euro payable decreases by $500,000 Option hedge increases by $375,000 Euro payable decreases by $800,000 Option hedge increases by $700,000