Pamlico Company has a $500,000, 15%, 3-year note dated January 1, 2019, payable to Forest National Bank. On December 31, 2020, the bank agreed to settle the note and unpaid interest of $75,000 for $50,000 cash and marketable securities having a current market value of $375,000. Pamlico’s acquisition cost of the securities is $385,000. Ignoring income taxes, what amount should Pamlico report as a gain from the debt restructuring on its 2020 income statement?
a. $65,000
b. $75,000
c. $140,000
d. $150,000