(a) the LCU is the functional currency and the translation method is appropriate or (b) the U.S. dollar is the functional currency and the remeasurement method is appropriate.

Bar Corporation had a realized foreign exchange loss of $13,000 for the year ended December 31, 20X2, and must also determine whether the following items will require year-end adjustment:

(1) Bar had a $7,000 credit resulting from the restatement in dollars of the accounts of its wholly owned foreign subsidiary for the year ended December 31, 20X2.

(2) Bar had an account payable to an unrelated foreign supplier to be paid in the supplier's local currency. The U.S. dollar equivalent of the payable was $60,000 on the October 31, 20X2, invoice date and $64,000 on December 31, 20X2. The invoice is payable on January 30, 20X3.

What amount of the net foreign exchange loss in computing net income should be reported in Bar's 20X2 consolidated income statement?

a. $6,000 b. $10,000 c. $13,000 d. $17,000

***So my question is I don't understand what's 7000 credit means? How to use it? Why we need to subtract 7000 when doing the remeasurment method?