Big Brown Corporation's derivative instruments had the following fair values at December 31, Year 1 and December 31, Year 2:

The derivatives used as fair value hedges and cash flow hedges were both considered highly effective in 20X7. What amount of gain from these derivative investments should Big Brown report in its Year 2 net income and other comprehensive income?

Net income.................. OCI
A. $0 ..................$255,000
B. $80,000 .........$175,000
C. $175,000 ......... $80,000
D. $255,000....................$0

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Speculative derivatives Derivatives used as fair value hedges Derivatives used as cash flow hedges 12/31 Year1 $280,000 $600,000 $430,000 12/31 Year 2 $310,000 $745,000 $510,000