CH 9 HW

Problem 9-26 (LO. 4)

Honk, Inc., a U.S. corporation, purchases weight-lifting equipment for resale from HiDisu, a Japanese corporation, for 60,000,000 yen. On the date of purchase, 110 yen is equal to $1 U.S. (110:$1). The purchase is made on December 15, 2020, with payment due in 90 days. Honk is a calendar year taxpayer. On December 31, 2020, the foreign exchange rate is 112:$1. On February 2, 2021, the invoice is paid when the exchange rate is 115:$1.

What amount of foreign currency gain or loss, if any, must Honk recognize for each year as a result of this transaction?

Round intermediate calculations and your final answer to the nearest dollar. If an amount is zero, enter "0".

2020: The foreign exchange gain or loss recognized is $

2021: The foreign exchange gain or loss recognized is $