McCarthy, Inc.'s Brazilian subsidiary borrowed 122,000 euros on January 1, 2020. Exchange rates between the Brazilian real (BRL) and euro () and between the U.S. dollar ($) and BRL are as follows:

	BRL per	US$ per BRL
January 1, 2020	BRL 4.20	$ 0.28
Average, 2020	BRL 4.30	$ 0.25
December 31, 2020	BRL 4.60	$ 0.20

Problem 10-20 (Algo) (LO 10-4)

1) At what amount should the Brazilian subsidiary's euro note payable be reported on McCarthy's December 31, 2020, consolidated balance sheet?

Multiple Choice

• $102,480.

• $112,240.

• $157,136.

• $104,920.

2) What amount of foreign exchange gain or loss should be reflected in McCarthy's 2020 consolidated net income?

Multiple Choice

• $2,440 gain.

• $6,100 gain.

• $12,200 loss.

• $9,760 loss.