Hunt Co. purchased merchandise for £300,000 from a vendor in London on November 30, 2006. Payment in British pounds was due on January 30, 2007. The exchange rates to purchase one pound were as follows:

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November 30, 2006

December 31, 2006

Spot-rate

$1.65

$1.62

30-day rate

1.64

1.59

60-day rate

1.63

1.56

In its December 31, 2006, income statement, what amount should Hunt report as foreign exchange transaction gain as part of net income?

  1. $12,000
  2. $ 9,000
  3. $ 6,000
  4. $0