On April 1, 2020, Shannon Company, a U.S. company, borrowed 100,000 euros from a foreign bank by signing an interest-bearing note due April 1, 2021. The dollar value of the loan was as follows: How much foreign exchange gain or loss should be included in Shannon's 2020 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, 2020, Shannon Company, a U.S. company, borrowed 100,000 euros from a foreign bank by signing an interest-bearing note due April 1, 2021. The dollar value of the loan was as follows:  How much foreign exchange gain or loss should be included in Shannon's 2020 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, 2020, Shannon Company, a U.S. company, borrowed 100,000 euros from a foreign bank by signing an interest-bearing note due April 1, 2021. The dollar value of the loan was as follows:  How much foreign exchange gain or loss should be included in Shannon's 2020 income statement?
A) $3,000 gain. 
B) $3,000 loss. 
C) $6,000 gain. 
D) $6,000 loss. 
E) $7,000 gain.