On April 1, 2012, Shannon Company, a U Angela Inc

Multiple Choice

On April 1, 2012, Shannon Company, a U.S. company, borrowed 100,000 euros from a foreign bank by signing an interest-bearing note due April 1, 2013. The dollar value of the loan was as follows: $\begin{array}{|l|l|}\hline {\text { Date }} & \text { Amount } \\\hline \text { April 1,2012 } & \$ 97,000 \\\hline \text { December 31,2012 } & \$ 103,000 \\\hline \text { April 1,2013 } & \$ 105,000 \\\hline\end{array}$ Angela Inc., a U.S. company, had a euro receivable from exports to Spain and a British pound payable resulting from imports from England. Angela recorded foreign exchange gain related to both its euro receivable and pound payable. Did the foreign currencies increase or decrease in dollar value from the date of the transaction to the settlement date? $$\begin{array} { | l | l | l | } \hline & \text { Euro } & \text { Pound } \\\hline \text { A) } & \text { Increase } & \text { Increase } \\\hline \text { B) } & \text { Increase } & \text { Decrease } \\\hline \text { C) } & \text { Decrease } & \text { Decrease } \\\hline \text { D) } & \text { Decrease } & \text { Increase } \\\hline \text { E) } & \text { No change } & \text { Decrease } \\\hline\end{array}$$

A) Option A
B) Option B
C) Option C
D) Option D
E) Option E