On July 1, 2015, Houghton Company borrowed 200,000 euros from a foreign lender evidenced...

On July 1, 2015, Houghton Company borrowed 200,000 euros from a foreign lender evidenced by an interest-bearing note due on July 1, 2016. The note is denominated in euros. The U.S. dollar equivalent of the note principal is as follows:

In its 2016 income statement, what amount should Houghton include as a foreign exchange gain or loss on the note?

a. $35,000 gain .

b. $35,000 loss .

c. $10,000 gain .

d. $10,000 loss .