On August $1,$ Year $3,$ Carleton Ltd$.$ ordered machinery from a supplier in Hong Kong for HK$$440,000.$ The machinery was delivered on

October $1,$ Year $3,$ with terms requiring payment in full by December $31,$ Year $3.$ On August $2,$ Year $3,$ Carleton entered a forward

contract to purchase HK $$440,000$ on December $31,$ Year $3,$ at a rate of $$0\mathrm{.}238.$ On December $31,$ Year $3,$ Carleton settled the forward

contract and paid the supplier.

Exchange rates were as follows:

# For contracts expiring on December $31,$ Year $3.$

Required:

$($b$)$ Assume that the forward contract was designated as a fair value hedge of the firm commitment to purchase the machinery and that

the balance in the commitment asset$/$liability account on October $1$ was transferred to the machinery account when the machinery was

delivered. Prepare the journal entries for Year $3$ to record all the activity described above and prepare a summary journal entry for the

combined effect of all entries. $($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.$)$