Acme Corporation, a U$.$S$.-$based importer of beer and wine, purchased $1,000$ cases of Oktoberfest$-$style beer from Coyote for $50,000$ euros before purchasing the company. Relevant US dollar exchange rates for the euro are as follows:

Date Spot Rate Forward Rate to October $15$ "Call Option Premium for October $15$

$($strike price $$1\mathrm{.}10)"$

August $15$ $$1\mathrm{.}10$ $$1\mathrm{.}16$ $$0\mathrm{.}05$

September $301\mathrm{.}151\mathrm{.}190\mathrm{.}06$

October $151\mathrm{.}181\mathrm{.}18($spot$)$ N$/$A

$3.$ Assume that the company ordered the beer on August $15.$ The beer arrived and the company paid for it on October $15.$ On August $15,$ the company entered into a two$-$month forward contract to purchase $50,000$ euros. The company designated the forward contract as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is measured by referring to changes in the forward rate. Forward points are not excluded in assessing hedge effectiveness. Prepare journal entries to account for the foreign currency forward contract, foreign currency firm commitment, and import purchase.

$4.$ Assume that the company ordered the beer on August $15.$ The beer arrived and the company paid for it on October $15.$ On August $15,$ the company purchased a two$-$month call option on $50,000$ euros. The company designated the option as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is measured by referring to changes in the spot rate. The time value of the option is excluded from the assessment of hedge effectiveness, and the change in time value is recognized in net income over the life of the option. Prepare journal entries to account for the foreign currency option, foreign currency firm commitment, and import purchase.

$5.$ Assume that on August $15,$ the company forecasted the purchase of beer on October $15.$ On August $15,$ the company acquired a two$-$month call option on $50,000$ euros. The company designated the option as a cash value hedge of a forecasted foreign currency transaction. The time value of the option is excluded from the assessment of hedge effectiveness, and the change in time value is recognized in net income over the life of the option. Prepare journal entries to account for the foreign currency option and import purchase.