Bawl Corp.acquired 100 shares of Darkness,Inc.for $75 per share for its trading portfolio.At December 31,2014,the value of the stock was $95 per share.How would Bawl record the adjustment to fair value?
A) Debit Fair Value Adjustment-Trading for $2,000 and credit Unrealized Gain-Equity for $2,000.
B) Debit Fair Value Adjustment-Trading for $2,000 and credit Unrealized Gain-Income for $2,000.
C) Debit Unrealized Gain-Equity for $2,000 and credit Fair Value Adjustment-Trading for $2,000.
D) Debit Unrealized Gain-Income for $2,000 and credit Fair Value Adjustment-Trading for $2,000.
E) Debit Short-Term Investments-Trading for $95,000 and credit Unrealized Gain-Equity for $95,000.
Correct Answer:
Verified
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