Rochester,Inc.purchased cameras from a Japanese company at a price of 4 million yen.On the purchase date,the exchange rate was $0.0100 per Japanese yen,but when Rochester,Inc. ,paid the liability,the exchange rate was $0.0103 per yen.When this foreign account payable was paid,Rochester,Inc. ,recorded a:

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CThe exchange rate increased from $0.0100 to $0.0103 per yen, meaning Rochester, Inc. had to pay more dollars per yen at the time of payment than at the time of purchase. This results in a loss because they paid more dollars for the same amount of yen. The original amount in yen was 4 million yen, initially valued at $0.0100 per yen, which equals $40,000 (4,000,000 yen * $0.0100/ yen). At the time of payment, the value was $0.0103 per yen, which equals $41,200 (4,000,000 yen * $0.0103/ yen). The difference of $1,200 ($41,200 - $40,000) is a loss. The credit to Accounts Payable would be for the full amount paid at the time of payment, which is $41,200, reflecting the actual cash outflow to settle the liability.