Morse Company Often Invests in the Stock of Other Companies

Morse Company often invests in the stock of other companies for long-term purposes.None of the stocks currently held by Morse qualify for use of the equity method.The following amounts relate to Morse's long-term portfolio of marketable equity securities. $$\begin{array} { l c r } & \text { Dec. } 31,2009 & \text { Dec. 31, 2010 } \\\text { Tatal cost } & \$ 280,000 & \$ 330,000 \\\text { Tatal market } & 230,000 & 292,000\end{array}$$ Based on the above information,the adjusting entry on December 31,2010 is:

A) $\begin{array}{llr} \text { Allowance to Adjust Long Term Investment to Market } &38,000 \\ \text { Unrealized Loss on Long-Term Investments } &&38,000\\\end{array}$

B) $\begin{array}{llr} \text { Allowance to Adjust Long Term Investment to Market } &12,000\\ \text {Unrealized Loss on Long-Term Investments } &&12,000\\\end{array}$

C) $\begin{array}{llr} \text { Unrealized Loss on Long-Term Investments } &38,000\\ \text {Allowance to Adjust Long Term Investment to Market } &&38,000\\\end{array}$

D) $\begin{array}{llr} \text { Unrealized Loss on Long-Term Investments} &12,000\\ \text { Allowance to Adjust Long Term Investment to Market} &&12,000\\\end{array}$