Use of futures contracts to hedge a forecasted transactioncash flow hedge

As of January, our company plans to purchase 200,000 lbs. of copper on May 31 at the prevailing spotrate. To hedge this forecasted transaction, we purchase May futures contracts in January for 200,000lbs. of copper at the futures price of $1.58/lb. On May 31, we close out our futures contracts by entering into an offsetting contract in which we agree to buy 200,000 lbs. of May copper futures contracts at $1.84/lb., the spot rate on that date. We also purchase 200,000 lbs. of copper at $1.84/lb. on that date. Finally, we sell the inventory in June for $2.06/lb. Our company operates on a calendar year and issues financial statements quarterly.

Fell-Ming are futures and spat prices fer the relevant dates: Ila-lie Inn Emma januaryr \"M $1.53 March EI1 $1.52 11.5? Hag-{1 \"Ed nt'a Required Prepare thejdurnal El'ltl'iE te recercl the Fellcming: (If no entry is requiredr select "Mcl entry- reutiluireclI fer bath the debit and credit account titlesJ a. Purchase at clapper futures centlact inJanuary inn] hum-l ute Duel-1pm nun Credit: ianuaryr ' U U [I [I b. Adjusting entry at March 31 March 31 - [1 - [I [I c. Purchase efcep-per cIn 1.|'|a5.I 31 May 31 - [1 [I - [1 [1 Tc: recerd in'u.-'e1'|tn::ir;.I purchase May 31 - [1 E1 E1 E1 ther cemprehens'we incclrne U- [I T: cluee dutfucures centlact d. Sale dfcepper enjune1 lune 1 Cash [1 E1 E1 [1 Sales El- E1 EII [I Tc: record lite sale dfceupper june 1 ' [l' U' - [I- [I Tc: recognize deferred gain