Homework answers / question archive / SJ Corporation, a Canadian corporation, has a December 31 year-end

SJ Corporation, a Canadian corporation, has a December 31 year-end

Accounting

Share With

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