On September 30, 2013, Fowler Corporation invested $800,000 in common stock of M

Question

On September 30, 2013, Fowler Corporation invested $800,000 in common stock of Mallard Industries as short-term non-trading securities. The market value of this investment was $830,000 at December 31, 2013, but had slipped to $825,000 by December 31, 2014. Assuming Fowler does not sell this investment and last adjusted the investment when preparing the financial statements on December 31, 2013, the adjustment necessary at December 31, 2014, includes a(an)

$5,000 debit to Stock Investments.

$25,000 credit to Unrealized Gain or Loss-Equity.

$5,000 debit to Unrealized Gain or Loss-Equity.

$825,000 debit to Fair Value Adjustment-Non-Trading

Explanation / Answer

$5,000 debit to Unrealized Gain or Loss-Equity.

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