McGinn Company Purchased 10% of RJ Company's Common Stock During

Multiple Choice

McGinn Company purchased 10% of RJ Company's common stock during 2010 for $100,000.The 10% investment in RJ had a $90,000 fair value at the end of 2010 and a $105,000 fair value at the end of 2011.Which of the following statements is correct if McGinn classified the investment as an available-for-sale security and sold it at the beginning of 2012 for $102,000?

A) The 2012 realized loss reported on the income statement is $3,000.
B) The 2012 realized gain reported on the income statement is $2,000.
C) The 2012 unrealized gain reported on the income statement is $2,000.
D) The 2012 unrealized loss reported on the income statement is $3,000.