On November $1,20$X$5,$ Davis signed a contract to purchase equipment from a foreign company for $200,000$ francs. The equipment was delivered to Davis on December $1$ with

payment due in $90$ days on March $1,20$X$6.$ On November $1,20$X$5,$ Davis Company entered into a $120-$day forward contract to purchase $200,000$ francs. The forward contract was

designated as a fair value hedge of a firm commitment. The relevant exchange rates are as follows:

What amount of foreign currency transaction gain or loss would Davis report on its income statement for year $20$X$5?$

$$3,000$ loss

$$2,000$ loss

$$4,000$ gain

$$1,000$ gain