On November 1,20X8,Denver Company Borrowed 500,000 Local Currency Units (LCU)from

question 31

Multiple Choice

On November 1,20X8,Denver Company borrowed 500,000 local currency units (LCU) from a foreign lender evidenced by an interest-bearing note due on November 1,20X9,which is denominated in the currency of the lender.The U.S.dollar equivalent of the note principal was as follows:

In its income statement for 20X9,what amount should Denver include as a foreign exchange gain or loss on the note principal?

• A)$15,000 gain
• B)$25,000 gain
• C)$15,000 loss
• D)$40,000 loss

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Definitions:

Assimilation

A cognitive process in Piaget's theory where individuals integrate new information into preexisting knowledge frameworks.

Mental Structures

Conceptual frameworks or cognitive constructs that are used to organize and interpret experiences and information.

Preoperational Stage

A stage in Jean Piaget's developmental theory of childhood, from about ages 2 to 7, where children begin to engage in symbolic play but lack the ability to perform operations or think logically.

Represent Another

A phrase that suggests acting on behalf of or symbolizing someone or something else.