Reference no: EM131789258

Question - On July 1, 2011, Houghton Company borrowed 200,000 Euros from a foreign lender evidenced by an interest-bearing note on July 1, 2012. The note is denominated in euros. The U.S. Dollar equivalent of the note principal is as follows:

July 1, 2011 (date borrowed) $195,000

December 31, 2011 (Houghton's year-end) $220,000

July 1, 2012 (date repaid) $230,000

In its 2012 Income Statement, what amount should Houghton include as a foreign exchange gain or loss on the note?

a) $25,000 gain

b) $35,000 loss

c) $10,000 gain

d) $10,000 loss