A U.S. company purchases a 3-month certificate of deposit from a Singapore bank at its face value of S$100,000 on December 1, 2023, when the spot rate is $0.72/S$. The certificate pays interest at an annual rate of 3 percent. On December 31, the company's year-end, the spot rate is $0.70/S$. On March 1, when the spot rate is $0.66/S$, the certificate of deposit matures, and the company receives principal and interest of S$100,750. At what amount does the company report the principal amount of its notes receivable at December 31, 2023?
A U.S. company purchases a 3-month certificate of deposit from a Singapore bank at its face value of S$100,000 on December 1, 2023, when the spot rate is $0.72/S$. The certificate pays interest at an annual rate of 3 percent. On December 31, the company's year-end, the spot rate is $0.70/S$. On March 1, when the spot rate is $0.66/S$, the certificate of deposit matures, and the company receives principal and interest of S$100,750. At what amount does the company report the principal amount of its notes receivable at December 31, 2023?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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H6
Transcribed Image Text:A U.S. company purchases a 3-month
certificate of deposit from a Singapore
bank at its face value of S$100,000 on
December 1, 2023, when the spot rate is
$0.72/S$. The certificate pays interest at
an annual rate of 3 percent. On
December 31, the company's year-end,
the spot rate is $0.70/S$. On March 1,
when the spot rate is $0.66/S$, the
certificate of deposit matures, and the
company receives principal and interest
of S$100,750.
At what amount does the company
report the principal amount of its notes
receivable at December 31, 2023?
Select one:
a. $72,000
b. $ 70,000
c. $100,000
d. $ 66,000
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