On September 1, 2014, Cano & Company, a U.S. corporation, sold merchandise to a foreign firm for 250,000 euros. Terms of the sale require payment in euros on February 1, 2015. On September 1, 2014, the spot exchange rate was $1.30 per euro. At Cano’s year-end on December 31, 2014, the spot rate was $1.28, but the rate increased to $1.33 by February 1, 2015, when payment was received.
1. What foreign currency transaction gain or loss should be recorded in 2014?
2. What foreign currency transaction gain or loss should be recorded in 2015?