Jackson Corporation (a U.S.-based company) sold parts to a Korean customer on December 16, 2024, with payment of 20 million Korean won to be received on January 15, 2025. The following exchange rates applied:
| Date | Spot Rate | Forward Rate to January 15 |
|---|---|---|
| December 16, 2024 | $ 0.00082 | $ 0.00089 |
| December 31, 2024 | 0.00080 | 0.00083 |
| January 15, 2025 | 0.00086 | 0.00086 |
Assuming a forward contract was entered into on December 16 as a fair value hedge, what would be the net foreign exchange gain or loss on Jackson’s 2024 income statement related to this transaction? Jackson amortizes forward points using the straight-line method. Ignore present values.
Multiple Choice
$200 (loss)
$600 (gain)
$700 (gain)
$800 (loss)
$0 (no impact)
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