Kidney Company has a wholly-owned foreign subsidiary which has a $15,000 credit translation adjustment in the current year.Kidney has taken out a loan denominated in the foreign currency in which the subsidiary operates as a hedge of its net investment in the foreign entity.The value of the loan increased $18,000 in the current year.What is the impact of the change in the loan value?
A)Debit other comprehensive income $18,000.
B)Credit other comprehensive income $18,000.
C)Debit other comprehensive income $15,000; debit income $3,000.
D)Debit other comprehensive income $3,000; credit income $15,000.

Question

Kidney Company has a wholly-owned foreign subsidiary which has a $15,000 credit translation adjustment in the current year.Kidney has taken out a loan denominated in the foreign currency in which the subsidiary operates as a hedge of its net investment in the foreign entity.The value of the loan increased $18,000 in the current year.What is the impact of the change in the loan value?
A)​Debit other comprehensive income $18,000.
B)​Credit other comprehensive income $18,000.
C)​Debit other comprehensive income $15,000; debit income $3,000.
D)​Debit other comprehensive income $3,000; credit income $15,000.

Quizplus · Accepted Answer

The Answer of Kidney Company has a wholly-owned foreign subsidiary which has a $15,000 credit translation adjustment in the current year.Kidney has taken out a loan denominated in the foreign currency in which the subsidiary operates as a hedge of its net investment in the foreign entity.The value of the loan increased $18,000 in the current year.What is the impact of the change in the loan value?
A)​Debit other comprehensive income $18,000.
B)​Credit other comprehensive income $18,000.
C)​Debit other comprehensive income $15,000; debit income $3,000.
D)​Debit other comprehensive income $3,000; credit income $15,000.

Kidney Company Has a Wholly-Owned Foreign Subsidiary Which Has a $15,000