Item1 75 points eBookReferencesCheck my workCheck My Work button is now enabled2Item 1 Pacifico Company, a U.S.-based importer of beer and wine, purchased 1,900 cases of Oktoberfest-style beer from a German supplier for 570,000 euros. Relevant U.S. 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 $1.50) August 15 $ 1.50 $ 1.56 $ 0.05 September 30 1.55 1.59 0.06 October 15 1.58 1.58 (spot) N/A The company closes its books and prepares third-quarter financial statements on September 30. 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 570,000 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.