7-Which of the following foreign subsidiary accounts would be translated into U.S. dollars using the historical exchange rate?

Select one:

a.Plant assets

b.Bonds payable

c.Capital stock

d.Bond Premium amortization

8- Pat, a U.S. Corporation, made a long-term, dollar-denominated loan of $600,000 to its British subsidiary on January 1, 2016 when the exchange rate for British pounds was $1.53. If the subsidiarys functional currency is its local currency, this transaction is a foreign currency transaction of:

Select one:

a.The parent company but not the subsidiary

b.The subsidiary company but not the parent

c.Both the subsidiary and the parent

d.Neither the subsidiary nor the parent

9- An exchange gain on a long-term loan of a U.S. parent to its British subsidiary whose functional currency is the British pound is:

Select one:

a.Recognized in consolidated income in the current year

b.Deferred until the loan is settled

c.Treated as an equity adjustment from translation

d.Treated as an equity adjustment from remeasurement