On August 1, 20X1, an American Firm Purchased a Machine

Multiple Choice

On August 1, 20X1, an American firm purchased a machine costing 200,000,000 yen from a Japanese firm to be paid for on October 1, 20X1. Also on August 1, 20X1, the American firm entered into a contract to purchase 200,000,000 yen to be delivered on October 1, 20X1, at a forward rate of 1 Yen = $0.00783. The exchange rates were as follows: $\begin{array}{ll}&\text { Spot }\\\text { August } 1,20 \mathrm{X} 1 & 1 \text { Yen }=\$ 0.00781 \\\text { August } 31,20 \mathrm{X} 1 & 1 \text { Yen }=\$ 0.00777 \\\text { October } 1,20 \mathrm{X} 1 & 1 \text { Yen }=\$ 0.00779\end{array}$ Which of the following statements is incorrect concerning the accounting treatment of these transactions?

A) The machine's final recorded value was $1,558,000.
B) The beginning balance in the accounts payable was $1,562,000.
C) An exchange gain on the accounts payable of $4,000 was recognized on October 1, 20X1.
D) The value of the accounts payable just before payment, on October 1, 20X1, was $1,558,000.