Assume That Ariel Agrees to Purchase US$500,000 for C$550,000 on January

Multiple Choice

Assume that Ariel agrees to purchase US$500,000 for C$550,000 on January 15,2013.The exchange rate at year end is US$1=C$0.95 and the January 15,2017 exchange rate is US$1=C$0.97.What journal entry is required when the contract is initiated?

A) 0
B) $65,000 loss.
C) $75,000 gain.
D) $75,000 loss.