Hedge of Forecasted Transaction, Firm Commitment, and Foreign-Currency-Denominated Liability Willson Leather Company, a calendar-year company, purchases merchandise from an Italian supplier on a regular basis. On November 1, 2013, Willson purchased ‚¬10,000,000 for delivery on March 1,2014, in anticipation of an expected purchase of merchandise. The forward purchase qualifies as a cash flow hedge. On January 15, 2014, Willson issued a purchase order for ‚¬10,000,000 in merchandise, establishing a firm commitment. The merchandise was received on February 1,2014. On March 1, 2014, Will-son closed the forward and paid the supplier. On March 15, the merchandise was sold to a U.S. customer for $25,000,000. Exchange rates ($/‚¬) are as follows:

Required
Prepare the journal entries to record the above events.

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Forward Rate for Delivery on March 1, 2014 Spot Rate $1.38 1.39 1.40 1.43 1.45 $1.41 1.42 1.43 1.45 1.45 December 31, 2013*.. January 15. 2014 February 1, 2014 March 1,2014.