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:

Social Contract Theory

A philosophical concept suggesting that people agree, either explicitly or implicitly, to surrender some freedoms to an authority in exchange for social order and protection.

Ethical Dilemmas

Situations in which a person is faced with difficult choices between conflicting moral principles or values.

Particular Relationships

Unique or specific connections and interactions between individuals based on personal, familial, or professional ties.

Mindfulness

A mental practice focusing on being acutely aware of what you're sensing and feeling in the moment, without interpretation or judgment.