Looking for help with Requriement B **Journal Entries for Option Hedge and Raw Materials Purchase**This table outlines all journal entries related to the option hedge of a forecasted transaction and the purchase of raw materials.| No | Date | General Journal | Debit | Credit ||----|------------|------------------------------------|--------------|--------------|| 1 | 12/15/2020 | Foreign currency option | 6,000 | || | | Cash | | 6,000 || 2 | 12/15/2020 | No journal entry required | | || 3 | 12/31/2020 | Foreign currency option | 7,000 | || | | Other comprehensive income | | 7,000 || 4 | 12/31/2020 | Cost of goods sold | 1,000 | || | | Other comprehensive income | | 1,000 || 5 | 03/15/2021 | Foreign currency option | 27,000 | || | | Other comprehensive income | | 27,000 || 6 | 03/15/2021 | Cost of goods sold | 5,000 | || | | Other comprehensive income | | 5,000 || 7 | 03/15/2021 | Foreign currency (francs) | 1,620,000 | || | | Cash | | 1,580,000 || | | Foreign currency option | | 40,000 || 8 | 03/15/2021 | Raw materials inventory | 1,620,000 | || | | Foreign currency (francs) | | 1,620,000 || 9 | 03/15/2021 | Accumulated other comprehensive income | 40,000 | || | | Cost of goods sold | | 40,000 || 10 | 03/15/2021 | Cost of goods sold | 1,620,000 | | **Problem 9-41 (Algo) (LO 9-9)**Based on past experience, Maas Corp. (a U.S.-based company) expects to purchase raw materials from a foreign supplier at a cost of 2,000,000 francs on March 15, 2021. To hedge this forecasted transaction, on December 15, 2020, the company acquires a call option to purchase 2,000,000 francs in three months. Maas selects a strike price of $0.79 per franc when the spot rate is $0.79 and pays a premium of $0.003 per franc. The spot rate increases to $0.794 at December 31, 2020, causing the fair value of the option to increase to $13,000. By March 15, 2021, when the raw materials are purchased, the spot rate has climbed to $0.81, resulting in a fair value for the option of $40,000. The raw materials are used in assembling finished products, which are sold by December 31, 2021, when Maas prepares its annual financial statements.a. Prepare all journal entries for the option hedge of a forecasted transaction and for the purchase of raw materials.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?---**Answer is not complete.**Complete this question by entering your answers in the tabs below.- Req A- Req B and C**b. What is the overall impact on net income over the two accounting periods?** (Negative amounts should be entered with a minus sign.)**c. What is the net cash outflow to acquire the raw materials?**| | Impact on Net Income ||-------------------------|----------------------|| b. Impact on net income in 2020 | || Impact on net income in 2021 | || c. Net cash outflow | $1,586,000 |*Note*: For Req A, the answer section is not visible.---

Solution:- Preparation of all journal entries for the option hedge of a forecasted transaction and…

Complete this question by entering your answers in the tabs below. Req A Req B and C b. What is the overall impact on net income over the two accounting periods? (Negative amounts should be entered with a minus sign.) c. What is the net cash outflow to acquire the raw materials? Impact on Net Income b. Impact on net income in 2020 Impact on net income in 2021