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Rachel Co. entered into a forward exchange contract on October 3, year 2, to purchase 100,000 Swiss francs in 90 days. The forward contract was entered into to hedge a purchase of inventory in September year 2, payable in January year 3. The relevant exchange rates are as follows:
At December 31, year 2, what amount of foreign currency transaction gain from this forward contract should Rachel include in net income?
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