Based on past experlence, Maas Corp. $($a U$.$S$.-$based company$)$ expects to purchase raw materlals from a forelgn supplier at a cost o $\backslash (1,000,000\backslash )$ francs on March $15,2021.$ To hedge this forecasted transaction, on December $15,2020,$ the company acquires a call optio to purchase $\backslash (1,000,000\backslash )$ francs in three months. Maas selects a strike price of $\backslash (\backslash$$ $0\mathrm{.}69\backslash )$ per franc when the spot rate is $\backslash (\backslash$$ $0\mathrm{.}69\backslash )$ and pays a premium of $\backslash (\backslash$$ $0\mathrm{.}001\backslash )$ per franc. The spot rate Increases to $\backslash (\backslash$$ $0\mathrm{.}697\backslash )$ at December $31,2020,$ causing the falr value of the option to increas to $\backslash (\backslash$$ $7,500\backslash ).$ By March $15,2021,$ when the raw materlals are purchased, the spot rate has climbed to $\backslash (\backslash$$ $0\mathrm{.}71\backslash ),$ resulting in a falr value for th option of $\backslash (\backslash$$ $20,000\backslash ).$ The raw materials are used in assembling finished products, which are sold by December $31,2021,$ when Maas prepares its annual financlal statements.

a$.$ Prepare all journal entries for the option hedge of a forecasted transaction and for the purchase of raw materlals.

b$.$ What Is the overall impact on net income over the two accounting periods?

c$.$ What Is the net cash outflow to acquire the raw materials?

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Prepare all journal entries for the option hedge of a forecasted transaction and for the purchase of raw materials. $($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.$)$