On July 31, Potter Co. purchased 2,000 shares of GigaTech stock for $16,000. The investment is classified as available-for-sale securities. This is the company's first and only investment in available-for-sale securities. On October 31, which is Potter's year-end, the stock had a fair value of $20,000. Potter should record a:
A) Debit to Unrealized Loss-Equity for $4,000.
B) Credit to Investment Revenue for $4,000.
C) Credit to Market Adjustment-Available-for-Sale for $4,000.
D) Debit to Unrealized Gain-Equity for $4,000.
E) Credit to Unrealized Gain-Equity for $4,000.
Correct Answer:
Verified
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