On December 31, 2014, Mumphrey Co. has the following costs and fair values for its investments classified as trading securities:
|
Investments |
Cost |
Fair Value |
|
Cub Co. |
$20,000 |
$25,000 |
|
Wrigley Co. |
34,000 |
32,000 |
The adjusting entry for Mumphrey Co. will include a debit to:
a. Unrealized Loss—Income of $5,000.
b. Fair Value Adjustment—Trading of $2,000.
c. Fair Value Adjustment—Trading of $3,000.
d. Unrealized Gain—Income of $3,000.