On April 1, 2010, Shannon Company, a U.S. company, borrowed 100,000 euros from a foreign bank by signing an interest-bearing note due April 1, 2011. The dollar value of the loan was as follows: $$\begin{array} { | l | c | }
\hline { \text { Date } } & \text { Amount } \
\hline \text { April 1,2010 } & \$ 97,000 \
\hline \text { December } 31,2010 & \$ 103,000 \
\hline \text { April 1, 2011 } & \$ 105,000 \
\hline
\end{array}$$
-How much foreign exchange gain or loss should be included in Shannon's 2010 income statement?
A) $3,000 gain.
B) $3,000 loss.
C) $6,000 gain.
D) $6,000 loss.
E) $7,000 gain.

Question

On April 1, 2010, Shannon Company, a U.S. company, borrowed 100,000 euros from a foreign bank by signing an interest-bearing note due April 1, 2011. The dollar value of the loan was as follows: $$\begin{array} { | l | c | } 
\hline  { \text { Date } } & \text { Amount } \
\hline \text { April 1,2010 } & \$ 97,000 \
\hline \text { December } 31,2010 & \$ 103,000 \
\hline \text { April 1, 2011 } & \$ 105,000 \
\hline
\end{array}$$
-How much foreign exchange gain or loss should be included in Shannon's 2010 income statement?
A) $3,000 gain.
B) $3,000 loss.
C) $6,000 gain.
D) $6,000 loss.
E) $7,000 gain.

Quizplus · Accepted Answer

The Answer of On April 1, 2010, Shannon Company, a U.S. company, borrowed 100,000 euros from a foreign bank by signing an interest-bearing note due April 1, 2011. The dollar value of the loan was as follows: $$\begin{array} { | l | c | } 
\hline  { \text { Date } } & \text { Amount } \
\hline \text { April 1,2010 } & \$ 97,000 \
\hline \text { December } 31,2010 & \$ 103,000 \
\hline \text { April 1, 2011 } & \$ 105,000 \
\hline
\end{array}$$
-How much foreign exchange gain or loss should be included in Shannon's 2010 income statement?
A) $3,000 gain.
B) $3,000 loss.
C) $6,000 gain.
D) $6,000 loss.
E) $7,000 gain.

On April 1, 2010, Shannon Company, a U -How Much Foreign Exchange Gain or Loss Should Be Included