Hayden Limited purchased knobs from a Greek company for 185,000 Euros. On the purchase date the exchange rate was $.80 per Euro, but when Hayden paid the liability, the exchange rate was $.70 per Euro. When this foreign account payable was paid, Hayden Limited, recorded a:

Question

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When the exchange rate decreased from $.80 to $.70 per Euro, Hayden Limited paid less in USD for the same amount of Euros, resulting in a gain of $18,500.

Hayden Limited Purchased Knobs from a Greek Company for 185,000