On November 1, 2018, A U.S. company sold merchandise to a foreign company for 375,000 krone. The payment in krone is due on January 31, 2019. The spot rate was as follows: $0.20 per krone on November 1, 2018; $0.21 per krone on December 31, 2018; and $0.19 per krone on January 31, 2019 when the payment was received. Which of the following incorrectly describes the accounting for this foreign currency transaction?
A. The foreign currency transaction gain included on the income statement for the year ending December 31, 2018 was $3,750.
B. The receivable was recorded at $75,000 on November 1, 2018.
C. The foreign currency transaction loss included on the income statement for the year ending December 31, 2019 was $3,750.
D. The receivable was recorded at $78,750 on the December 31, 2018 balance sheet.
Answer: C
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