On November 1, 20X8, Denver Company borrowed 500,000 local currency units (LCU) from a foreign lender evidenced by an interest-bearing note due on November 1, 20X9, which is denominated in the currency of the lender. The U.S. dollar equivalent of the note principal was as follows:

7/1/X8 (date borrowed)	$	100,000
12/31/X8 (Denvers year-end)		125,000
7/1/X9 (date repaid)		140,000

In its income statement for 20X9, what amount should Denver include as a foreign exchange gain or loss on the note principal?

Multiple Choice

$15,000 gain

$25,000 gain

$15,000 loss

$40,000 loss