OTTON AVIS YOU WERE SURE AND INCORRECT credit to Foreign Currency Transaction Gain Candy Bouquet Inc. imports specialty candy from a supplier in England at a price of 10,000. The exchange rate at the time of purchase is S171 Canadian dollars per pound At year-end, the exchange rate is $1.73 Canadian dollars per pound. The year-end journal entry would include debit to Accounts Payable. credit to Foreign Currency Transaction Loss THE CORRECT ANSWER credit to Accounts Payable Oi I DON'T KNOW YET WHAT YOU NEED TO KNOW At year-end, the payable must be reported at its current dollar value. Since the exchange rate increased from $131 to 51.73, Candy Bouquet Ine's payable will have increased. To record the change in the exchange rate of the pound at year- end (10,000 pounds - (S1,73-5.71), the journal entry would be as follows: DR Foreign Currency Transaction Loss $200 CR Accounts Payable $200