$($b$)$ Prepare the journal entries for the same items as in part $($a$)$ assuming that MEI designates the forward contract as a fair value

hedge. $($In cases where no entry is required, please select the option $"$No journal entry required" for your answer to grade

correctly. Leave no cells blank $-$ be certain to enter $"0"$ wherever required.$)$

$($i$)$ The sale and the forward contract on December $1$ and $3,$ Year $5$

$($ii$)$ any adjustments required on December $31$

$($iii$)$ the cash received and settlement of the contracts in Year $6$Manitoba Exporters Inc. $($MEI$)$ sells Inuit carvings to countries throughout the world. On December $1,$ Year $5,$ MEI sold $13,000$ carvings to

a wholesaler in a foreign country at a selling price of $650,000$ foreign currency units $($FC$)$ when the spot rate was FC$1$ $$$0\mathrm{.}758.$ The

invoice required the foreign wholesaler to remit by April $1,$ Year $6.$ On December $3,$ Year $5,$ MEI entered into a forward contract with the

Royal Bank to sell FC$650,000$ at the $120-$day forward rate of FC$1=$$$0\mathrm{.}798$ when the spot rate was still $FC1=$$$0\mathrm{.}758.$

The fiscal year$-$end of MEI is December $31,$ and on this date the spot rate was FC$1=$$$0\mathrm{.}774$ and the forward rate was $FC1=$$$0\mathrm{.}808.$ The

payment from the foreign customer was recelved on April $1,$ Year $6,$ when the spot rate was FC$1=$ $$0\mathrm{.}819.$

Assume that MEI uses hedge accounting. Also, assume that the forward element and spot elements on the forward contract are

accounted for separately.

Required:

$($a$)$ Prepare the journal entries for the below items assuming that MEI designates the forward contract as a cash flow hedge: $($In cases

where no entry is required, please select the optlon $"$No journal entry required" for your answer to grade correctly. Leave no cells

blank $-$ be certaln to enter $"$O$"$ wherever required.$)$

$($I$)$ The sale and the forward contract on December $1$ and $3,$ Year $5$

$($II$)$ any adjustments required on December $31$

$($III$)$ the cash recelved and settlement of the contracts in Year $6$

Please complete the missing numbers