Candy Co., a U.S. company, imported goods for 790,000 yen on November 15, Year 1. Candy Co. paid for the goods on December 15 of the same year. The following exchange rates were applicable:

Date Exchange Rate

Nov 15, Yr. 1 $0.013

Dec 15, Yr. 1 $0.020

On December 15, Year 1, Candy Co. will book a:

1. Cash payout of $5,530

2. Cash payout of $10,270

3. Foreign exchange transaction gain of $5,530

4. Foreign exchange transaction loss of $5,530