Business, 28.05.2020 18:00 sofiav44

Blight Financial has an investment in bonds issued by Searing Industries that are classified as trading securities. At December 31, Year 2, the Investment in Searing bonds account had a debit balance of $500,000, and the bonds were purchased at par so the $500,000 equals amortized cost. The Fair Value Adjustment account had a debit balance of $20,000. On December 31, Year 3, the amortized cost of those bonds has not changed, but the fair value of those bonds was $515,000.
Which of the following will be included in the related journal entry dated December 31, Year 3?

a) Debit to Fair value adjustment for $5,000.
b) Credit to Fair value adjustment for $5,000.
c) Debit to Fair value adjustment for $25,000.
d) Credit to Fair value adjustment for $25,000.

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