Melton Company sold equipment to a Canadian company for 100,000 Canadian dollars (C$) on January 1, 20X9, with settlement to be in 60 days. On the same date, Melton entered
into a 60-day forward contract to sell 100,000 Canadian dollars at a forward rate of 1 C$ = $0.94 in order to manage its exposed foreign currency receivable. The forward contract is
not designated as a hedge. The spot rates were:
January 1, 20X9
March 1, 20X9
1 C$ = $0.945
1 C$ = $0.930
Based on the preceding information, the entry to revalue foreign currency payable to current U.S. dollar value on March 1 will have:
a credit to Foreign Currency Transaction Gain for $1,000.
a credit to Foreign Currency Transaction Gain for $1,500.
a debit to Foreign Currency Transaction Loss for $1,500.
a debit to Foreign Currency Transaction Loss for $2,500.