Citron Company is a U.S.- based citrus grower. On October 1, 2024, the company entered into a contract to ship 25,000 boxes of grapefruit on January 28 to Japan. Payment of 50,100,000 yen is to be received on March 29, 2025. On October 1, Citron also entered into a forward contract to sell 50,100,000 yen on March 29 at the forward rate of $.007412. The forward contract is considered a hedge of the unrecognized foreign currency commitment. The direct exchange rate and forward rate for the yen were as follows:

Required:
A. Prepare the necessary journal entries to record the following transactions and events:

B. Compute the increase or decrease in income for each fiscal year as a result of the transactions above.
C. Compute the increase or decrease in income each period that would have occurred if Citron had not entered into the forward contract.

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Spot rate Forward rate available for the remaining period of the forward contract October 1 $.007235 .007412 December 31 $.007879 .007910 January 28 $.007623 .007674 March 29 $.007640 No appl.