A Debt Service Fund Paid $2,000,000 for Securities for Use

Multiple Choice

A debt service fund paid $2,000,000 for securities for use as income investments during the year. During the year, $30,000 of investment income is received in cash. At year-end, the fund still holds the securities, and their market value has declined to $1,990,000. How is this reported by the debt service fund?

A) Investments, $2,000,000 on the balance sheet, and investment income of $20,000 on the operating statement.
B) Investments, $1,990,000 and deferred outflows, $10,000 on the balance sheet and investment income of $30,000 on the operating statement.
C) Investments, $1,990,000 on the balance sheet, and investment income of $20,000 on the operating statement.
D) Investments, $2,000,000 on the balance sheet, and investment income of $30,000 on the operating statement.