A Company Purchases Corporate Bonds for $1,000,000 and Categorizes Them

A company purchases corporate bonds for $1,000,000 and categorizes them as AFS. At year-end, their market value is $750,000. $100,000 of the decline in value is attributed to a rise in market interest rates, and $150,000 of the decline is attributed to credit losses. Which statement below is true concerning the entry to record the decline in value?

A) The investment account, net of its allowance for losses, declines by $100,000.
B) An impairment loss of $150,000 is reported in income.
C) The investment account is directly reduced by $150,000.
D) An impairment loss of $100,000 is reported in income.