What amount should houghton include as a foreign exchange


On July 1, 2011, Houghton Company borrowed 200,000 Euros from a foreign lender evidenced by an interest-bearing note on July 1, 2012. The note is denominated in euros. The U.S. Dollar equivalent of the note principal is as follows:

July 1, 2011 (date borrowed) $195,000
December 31, 2011 (Houghton's year-end) $220,000
July 1, 2012 (date repaid) $230,000

In its 2012 Income Statement, what amount should Houghton include as a foreign exchange gain or loss on the note?

 

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Accounting Basics: What amount should houghton include as a foreign exchange
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