The next step is to convert the image into a layer. You can either use the keyboard shortcut Ctrl+Shift+B, or go to the Layer menu and select New > Layer From Background. You can name the layer if you want, but there's no need to. Click OK to make the layer.
Now the image is a layer we can move it around and edit it. Click on the Edit menu, and select Free Transform, or just use the keyboard shortcut Ctrl+T.
You'll see that drag handles have now appeared around the image, and you can use these to rotate it, but a more precise method is to use the numerical angle box at the top of the screen.
If you click in this box and move your mouse scroll wheel, the number in the box will be incremented up or down in increments of 0.1 degrees. Higher numbers rotate the image clockwise, lower number anticlockwise. Carefully rotate the image until the horizon lines up with the guide line. Press enter twice to confirm both the angle and the transform.