Use the following information on the U.S. dollar value of the euro to answer the question below.

Spot Rate

Forward Rate for

April 30, 2018 Delivery

October 30, 2017

$1.15

$1.20

December 31, 2017

1.18

1.22

April 30, 2018

1.17

1.17

On October 30, 2017, a U.S. company forecasts that it will purchase merchandise from an Italian supplier at the end of April 2018, in the amount of 1,000,000, and will pay the supplier on delivery.On October 30, the company enters a forward contract to buy1,000,000 on April 30, 2018, and classifies it as a cash flow hedge.On April 30, the company receives the merchandise, closes the forward contract and pays the supplier.The company's accounting year ends December 31.

On December 31, 2017, how is the change in value of the forward contract reported?

a.$20,000 gain, reported in income

b.$20,000 gain, reported in other comprehensive income

c.$30,000 loss, reported in income

d.$30,000 loss, reported in other comprehensive income