Lawrence Company, a U.S. company, ordered parts costing 1,000,000 Thailand bahts from a foreign supplier on March 7 when the spot rate was $0.025 per baht. A one-month forward contract was signed on that date to purchase 1,000,000 bahts at a rate of $0.028. The forward contract is properly designated as a fair value hedge of the 1,000,000 baht firm commitment. On April 7, when the parts were received, the spot rate is $0.027. What is the amount of accounts payable on this date before payment?

a.

$20,100.

b.

$28,000.

c.

$27,000.

d.

$20,000.

e.

$25,000.

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