Question
SJ Corporation, a Canadian corporation, has a December 31 year-end. On January 1, 2019, it borrowed US$2,000,000 from an American bank. The loan is scheduled
SJ Corporation, a Canadian corporation, has a December 31 year-end. On January 1, 2019, it borrowed US$2,000,000 from an American bank. The loan is scheduled to be repaid on December 31, 2023. Interest of 10% is paid annually on December 31. The following exchange rates existed on the dates significant for accounting purposes:
January 1, 2019 US$1.00 = C$1.21
Average 2019 US$1.00 = C$1.18
December 31, 2019 US$1.00 = C$1.16
Average 2020 US$1.00 = C$1.10
December 31, 2020 US$1.00 = C$1.02 What is SJ's exchange gain relating to the interest paid for the year ended December 31, 2019?
Multiple Choice:
a.) $0
b.)$4,000 gain
c.) $6,000 gain
d.) $10,000 gain
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started