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Exercise A-8 (Algo) Derivatives; foreign currency; cash flow hedge [LOA-4] Cleveland Company is a U.S. firm with a U.S. dollar functional currency that manufactures copper-related products. It forecasts that it will sell 4,000 feet of copper tubing to one of its largest customers at a price of 48,000,000. Although this sale has not been firmly committed, Cleveland expects that the sale will occur in six months on June 30, 2022. Thus, Cleveland is exposed to changes in foreign currency exchange rates. To reduce this exposure, Cleveland enters into a six-month foreign currency exchange forward contract with a third-party dealer on January 1, 2022, to deliver and receive US$. The foreign exchange contract has the following terms: ipped Book Contract amount: 48.000.000 Maturity date: June 30, 2022 Forward contract rate: 101.00 = US $1.00 Ask Yen / US$ Exchange rates: Date January 1 March 31 June 30 Print Spot rate 93.00/US $1.00 97.00/US $1.00 105.00/US $1.00 Forward rate for June 30 101.00/US $1.00 103.00/US $1.00 -rences Cleveland obtains the fair values of the forward exchange contract from the third-party dealer. Swap fair value January 1 March 31 June 30 $0 $ 8,900 $18,105 Required: 1. Calculate the net settlement on June 30, 2022. 2. Prepare the journal entries for the period January 1 to June 30, 2022, to record the forward contract, necessary adjustments for changes in fair value, and settlement. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the net settlement on June 30, 2022. (Round your intermediate and final answer to the nearest whole dollar.) June 30 Net cash settlement Required 1 Required 2 Prepare the journal entries for the period January 1 to June 30, 2022, to record the forward contract, necessary adjustments for changes in fair value, and settlement. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to the nearest whole dollar.) View transaction list Journal entry worksheet 2 3 4 5 6 To record the change in the fair value of the derivative. Note: Enter debits before credits. General Journal Debit Credit Date January 01 Record entry Clear entry View general journal Journal entry worksheet