Transaction of foreign currency

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Reference no: EM13116403

Grete Corp. had the following foreign currency transactions during 2009:

- Purchased merchandise from a foreign supplier on Jan 20,2009, for the U.S. dollar equivalent of $60,000 and paid the invoice on April 20, 2009, at the U.S. Dollar equivalent of $68,000

- On Sept 1, 2009, borrowed the U.S. dollar equivalent of $300,000 evidenced by a note that is payable in the lender's local currency on Sept 1, 2010. On Dec 31, 2009, the U.S. dollar equivalent of the pricipal amount was $320,000.

In Grete's 2009 income statement, what amount should be included as a foreign exchange loss?

a) $4,000

b) $20,000

c) $22,000

d) $28,000

Reference no: EM13116403

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