What amount of foreign exchange gain or loss should be reflected in McCarthy’s 2020 consolidated net income?

a. $8,000 loss.

b. $10,000 loss.

c. $2,000 gain.

d. $5,000 gain.

McCarthy, Inc.’s Brazilian subsidiary borrowed 100,000 euros on January 1, 2020. Exchange rates between the Brazilian real (BRL) and euro (€) and between the U.S. dollar ($) and BRL are as follows:

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BRL per € US$ per BRL January 1, 2020 Average, 2020 .... December 31, 2020 BRL 4.2 $0.28 BRL 4.3 $0.25 BRL 4.6 $0.20 ...