Answer: Therefore, there was a gain of €18,800
Explanation:
From the question, we are informed that Hayden, Inc. purchased knobs from a Greek company for 188,000 Euros and that on the purchase date the exchange rate was $0.80 per Euro, but when Hayden paid the liability, the exchange rate was $0.70 per Euro.
When this foreign account payable was paid, Hayden, Inc., recorded a:
= (€188,000 × 0.80) - (€188,000 × 0.70)
= €150400 - €131600
= €18,800
Therefore, there was a gain of €18,800
