Question: ACB, Inc., engages in a forward transaction and is applying fair value hedge accounting. ACB holds the underlying instrument and hedges it by selling this

ACB, Inc., engages in a forward transaction and is applying fair value hedge accounting. ACB holds the underlying instrument and hedges it by selling this forward contract. During the hedge period, the underlying instrument increases in value by $250,000, whereas the derivative decreases in value by $220,000. Identify the accounting entries required and how ACB's earnings and balance sheet would be affected?

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