Please Answer Question 15A and 15B. Question 14 only included to provide information necessary to answer 15. thank you!

4. The Budvar Company sells parts to a foreign customer on December 1, Year 1, with payment of 20,000 crowns to be received on March 1, Year 2. Budvar enters into a forward contract on December 1, Year 1, to sell 20,000 crowns on March 1, Year 2. Relevant exchange rates for the crown on various dates are as follows: Budvar's incremental borrowing rate is 12 percent. The present value factor for two months at an annual interest rate of 12 percent ( 1 percent per month) is 0.9803. Budvar must close its books and prepare financial statements at December 31 . Donuimad. 15. The same facts apply as in Exercise 14 except that Budvar Company purchases parts from a foreign supplier on December 1, Year 1, with payment of 20,000 crowns to be made on March 1, Year 2. On December 1, Year 1, Budvar enters into a forward contract to purchase 20,000 crowns on March 1, Year 2. The parts purchased on December 1, Year 1, become a part of the cost of goods sold on March 15, Year 2. Required: a. Assuming that Budvar designates the forward contract as a cash a. Assuming that Budvar designates the forward contract as a cash flow hedge of a foreign currency payable, prepare journal entries for these transactions in U.S. dollars. What is the impact on Year 1 net income? What is the impact on Year 2 net income? What is the impact on net income over the two accounting periods? b. Assuming that Budvar designates the forward contract as a fair value hedge of a foreion currency navable nrenare inurnal b. Assuming that Budvar designates the forward contract as a fair value hedge of a foreign currency payable, prepare journal entries for these transactions in U.S. dollars. What is the impact on Year 1 net income? What is the impact on Year 2 net income? What is the impact on net income over the two accounting periods? 4. The Budvar Company sells parts to a foreign customer on December 1, Year 1, with payment of 20,000 crowns to be received on March 1, Year 2. Budvar enters into a forward contract on December 1, Year 1, to sell 20,000 crowns on March 1, Year 2. Relevant exchange rates for the crown on various dates are as follows: Budvar's incremental borrowing rate is 12 percent. The present value factor for two months at an annual interest rate of 12 percent ( 1 percent per month) is 0.9803. Budvar must close its books and prepare financial statements at December 31 . Donuimad. 15. The same facts apply as in Exercise 14 except that Budvar Company purchases parts from a foreign supplier on December 1, Year 1, with payment of 20,000 crowns to be made on March 1, Year 2. On December 1, Year 1, Budvar enters into a forward contract to purchase 20,000 crowns on March 1, Year 2. The parts purchased on December 1, Year 1, become a part of the cost of goods sold on March 15, Year 2. Required: a. Assuming that Budvar designates the forward contract as a cash a. Assuming that Budvar designates the forward contract as a cash flow hedge of a foreign currency payable, prepare journal entries for these transactions in U.S. dollars. What is the impact on Year 1 net income? What is the impact on Year 2 net income? What is the impact on net income over the two accounting periods? b. Assuming that Budvar designates the forward contract as a fair value hedge of a foreion currency navable nrenare inurnal b. Assuming that Budvar designates the forward contract as a fair value hedge of a foreign currency payable, prepare journal entries for these transactions in U.S. dollars. What is the impact on Year 1 net income? What is the impact on Year 2 net income? What is the impact on net income over the two accounting periods