Taste Bits Inc

Multiple Choice

Taste Bits Inc.purchased chocolates from Switzerland for 200,000 Swiss francs (SFr) on December 1,20X8.Payment is due on January 30,20X9.On December 1,20X8,the company also entered into a 60-day forward contract to purchase 200,000 Swiss francs.The forward contract is not designated as a hedge.The rates were as follows:

-Based on the preceding information,the entries on December 31,20X8 related to the forward contract include a:

A) Credit to Foreign Currency Payable to Exchange Broker,$4,000.
B) Debit to Foreign Currency Receivable from Exchange Broker,$6,000.
C) Debit to Foreign Currency Receivable from Exchange Broker,$186,000.
D) Debit to Foreign Currency Transaction Gain,$4,000.