Taste Bits Inc.purchased chocolates from Switzerland for 200,000 Swiss francs (SFr) on December 1,2008.Payment is due on January 30,2009.On December 1,2008,the company also entered into a 60-day forward contract to purchase 100,000 Swiss francs.The forward contract is not designated as a hedge.The rates were as follows:
-Based on the preceding information,the entries on December 31,2008,include a:
A) Credit to Foreign Currency Payable to Exchange Broker,$4,000.
B) Debit to Foreign Currency Receivable from Exchange Broker,$6,000.
C) Debit to Foreign Currency Receivable from Exchange Broker,$186,000.
D) Debit to Foreign Currency Transaction Gain,$4,000.
Correct Answer:
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