On June 18, Johnson Company (a U.S. Company) sold merchandise to the Frater Company of Denmark for 60,000 Euros, with a payment due in 60 days. If the exchange rate was $1.14 per euro on the date of sale and $1.35 per euro on the date of payment, Johnson Company should recognize a foreign exchange gain or loss in the amount of:

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On the date of sale, the value of the sale in USD is 60,000 Euros * $1.14/Euro = $68,400. On the date of payment, the value of the received payment in USD is 60,000 Euros * $1.35/Euro = $81,000. The difference between the value at payment and the value at sale is $81,000 - $68,400 = $12,600, which is a gain because the value of the euro increased relative to the dollar between the sale and the payment dates.

On June 18, Johnson Company (A U