Assume That Barun Agrees to Purchase US$500,000 for C$550,000 on January

question 83

Multiple Choice

Assume that Barun agrees to purchase US$500,000 for C$550,000 on January 15,2018.The exchange rate at year-end is US$1 = C$0.95 and the January 15,2018 exchange rate is US$1 = C$0.97.What journal entry is required at Jan 15,2018?

• A) $10,000 gain.
• B) $10,000 loss.
• C) $75,000 gain.
• D) $75,000 loss.

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Definitions:

Straight-Line Amortization

A method of calculating the depreciation of an asset or the repayment of a loan in equal installments over a specified period of time.

Accrued Interest

Interest that has accumulated but remains unpaid.

Discount on Bonds Payable

The difference between the face value of a bond and its lower selling price before maturity, reflecting investor perceptions of risk or interest rate differences.

Adjusting Entry

An accounting entry made at the end of an accounting period to allocate income and expenditure to the correct period for a more accurate financial statement.