On July 1, 2011, Houghton Company borrowed 200,000 euros from a foreign lender evidenced by an interest-bearing note due on July 1, 2012.The note is denominated in euros.The U.S.dollar equivalent of the note principal is as follows: 11eb9247_5f81_3a57_a81e_85e1fb27b183_SM1528_00 In its 2012 income statement, what amount should Houghton include as a foreign exchange gain or loss on the note a.$35,000 gain. b.$35,000 loss. c.$10,000 gain. d.$10,000 loss.

Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik

Edition 10ISBN: 978-1260575910

Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik

Edition 10ISBN: 978-1260575910

Exercise 21

On July 1, 2011, Houghton Company borrowed 200,000 euros from a foreign lender evidenced by an interest-bearing note due on July 1, 2012.The note is denominated in euros.The U.S.dollar equivalent of the note principal is as follows:

In its 2012 income statement, what amount should Houghton include as a foreign exchange gain or loss on the note
a.$35,000 gain.
b.$35,000 loss.
c.$10,000 gain.
d.$10,000 loss.

Explanation

Verified

Foreign currency transaction:
It refers...