4. Accounting for Derivative Securities - Fair Value Hedge (15 points) On 1 September 20X5 Pixies Company, a mining entity had 100,000 pounds of copper that cost $275,000 to produce. Management chooses to hedge the copper position against a decline in copper prices (a fair value hedge) by entering into a copper futures contract to sell 100,000 pounds of copper at $3.72 per pound. The futures contract matures in March 20X6 which coincides with the date management expects to sell the copper they hold. A summary of the copper spot and futures prices on relevant dates is as follows: The contract has no value at inception. Assume that Pixies' management designates the derivative as a fair value hedge. Please record required transactions on the following dates: a) Adjusting journal entries on 12/31/X5. (5 pts) b) Adjusting journal entries on 3/21/X6 to update accounts. (4 pts) c) Net settlement of the futures contract on 3/21/X6. (1 pt) d) Sale of the Copper on 3/21/X6. (5 pts)