Six Months Ago, a Company Purchased an Investment in Stock

question 209

Multiple Choice

Six months ago, a company purchased an investment in stock for $70,000. The investment is classified as available-for-sale securities. This is the company's first and only investment in available-for-sale securities. The current fair value of the stock is $68,500. The company should record a:

• A) Credit to Unrealized Gain-Equity for $1,500.
• B) No entry is required.
• C) Credit to Investment Revenue for $1,500.
• D) Debit to Unrealized Loss-Equity for $1,500.
• E) Debit to Investment Revenue for $1,500.

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Definitions:

Consumer Income

The total amount of income a consumer or household earns from various sources, including employment, investments, and benefits, which impacts their spending and saving behaviors.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded at those prices.

Consumer Income

The total earnings of an individual or household from various sources, determining their purchasing power.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded.