Top, a US Company, has a 100% owned subsidiary in Japan.The functional currency for the subsidiary is the Japanese yen. The subsidiary purchases merchandise on credit from a German company, with payment due in US dollars. Between the date of sale and the due date of the payable, the yen strengthens against the US dollar. What will be the result to Top.

a.there will be a foreign exchange gain because the yen is worth more it will pay less

b. there will be a foreign exchange loss

c. there will be no foreign exchange gain or loss

d. there will be both a foreign exchange gain and loss

e. there will be a bad debt expense to the German company