On September 3, 2018, a U.S.-based company with the $US as its functional currency purchased merchandise for 18,000 units of the foreign companys local currency. On that date, the spot rate was $1.45. The U.S.-based company paid the bill in full on February 15, 2019, when the spot rate was $1.42. The spot rate was $1.41 on December 31, 2018. What amount should the U.S.-based company report as a foreign currency transaction gain (loss) in its income statement for the year ended December 31, 2018?

a. $720

b. $540

c. $(720)

d. $(540)